What does the Budget mean for the future of housing and local government? Georgia Harris, Political Consultant at Dods, considers the key announcements, remaining uncertainties and what they could mean for the sector.
What are the key takeaways for your sector?
Georgia Harris: For housing, much of this Budget’s attention went to first-time buyers, alongside further funding for social housing and rough sleeping.
Your First Home, trailed in September, now has its detail. The £4.7bn scheme is intended to support 70,000 first-time buyers with government equity loans of up to 20 percent, a reduced deposit and a five-year interest-free period, which the Government said will save the typical buyer hundreds of pounds a month.
Saving for a first home is changing too. From April 2029, a new First-Time Buyer ISA will replace the Lifetime ISA (LISA) for new savers, with a 25 percent government bonus of up to £20,000 towards a home worth up to £450,000. For existing LISA holders, the Government will reduce the withdrawal charge for those who use their savings to purchase a house of up to the same value.
Beyond home ownership, the Social and Affordable Homes Programme receives a further £1.5bn, taking total investment to more than £40bn over ten years.
On homelessness, the Budget confirms £874m as the total investment for rough sleeping between 2026-27 and 2028-29. This follows the Prime Minister’s announcement on 25 October, which doubled the funding with the aim of offering everyone sleeping rough a route off the streets by Christmas.
Three tax changes are also worth noting. From April 2027, income tax rates on property income will rise by two percentage points. Stamp Duty Land Tax on rent paid under assured tenancies in England has been removed, backdated to May 2026, following the Renters’ Rights Act. And from late 2027, a new Securities Transfer Tax will replace Stamp Duty and Stamp Duty Reserve Tax on share transactions.
What has the Government not sufficiently addressed in the Budget for your sector?
Georgia Harris: The Budget’s new homelessness funding is focused on people already sleeping rough. It made no changes to Local Housing Allowance (LHA), which sets the maximum amount of housing benefit that private renters can claim and remains frozen while rents rise. Nor did it uprate councils’ Housing Benefit subsidy for temporary accommodation, which is generally capped at 90 percent of the relevant January 2011 LHA rate. Councils therefore continue to cover a growing share of temporary accommodation costs themselves, while the Budget offers little new support specifically aimed at preventing households from becoming homeless in the first place.
That pressure feeds into council finances more widely. The Budget provides debt relief of £500m for Woking Borough Council and £200m for Thurrock Council, but this support is targeted at individual councils rather than offering wider financial help across local government.
The Government has also confirmed that it will make no major changes to building regulations for the rest of this Parliament, except for where it is critical for safety, including implementing the Grenfell Inquiry recommendations. The aim is to give housebuilders and councils confidence that the rules will not change while they plan and build new homes. However, this also means that, outside of building safety, the standards required of new homes are unlikely to be updated before the next general election.
What has the Government not sufficiently addressed in the Budget for your sector?
Georgia Harris: While the Budget avoided broad-based tax increases and offered targeted relief, there are fundamental issues left unresolved.
Energy support was prominent within the Budget; the Iran war provides inescapable headwinds. The Budget confirmed a 20–25 percent electricity discount for around 10,000 energy-intensive manufacturing businesses from April 2027, including a back payment for 2026–27. However, techUK highlighted the absence of immediate electricity-cost relief for data centres and mobile network operators. For these businesses, administrative savings will offer limited compensation for high operating costs.
The Government’s support for research and technological development has been accompanied by a more explicit emphasis on commercial outcomes and its contribution to wider industrial priorities. However, the British Academy criticised the failure to address universities’ financial difficulties, while research organisations warned that departmental capital savings could put R&D under further pressure. Support for commercialisation will be harder to sustain if the institutions supplying research, skills and new ideas remain financially vulnerable. The Budget therefore offers some relief without resolving the underlying pressures on these sectors. Operating costs and financial fragility continue to constrain businesses and research institutions. Therefore, the landscape in which business operate may not see a stark different following the budget.
Have the Government’s priorities changed in your sector? Why?
Georgia Harris: The Government’s overall direction has not changed. But Andy Burnham’s pledge of “good growth in every postcode” signals how much more weight devolution now carries.
Devolution was already a priority under Keir Starmer, whose government set out its plans in the English Devolution White Paper alongside a programme of local government reorganisation. Under Burnham, a former mayor himself, it has moved to the centre of the agenda. As Mayor of Greater Manchester, he urged the then-Government to devolve a “shopping list” of powers to mayors. Before taking office, he promised “the biggest rebalancing of power our country has seen”, and in his first speech as Prime Minister he pledged to “take power out of here [Whitehall] and carry it into every postcode in the land”.
The Budget turns that into numbers. The Fiscal Devolution Roadmap, published alongside it, gives mayoral strategic authorities a share of business rates from 2027 and of income tax from 2028.
The Budget also outlined that mayors and local leaders will be able to set up Good Growth Funds to pool funding behind local priorities, backed by £285m in 2027-28 and a £1.5bn borrowing facility for mayoral authorities from April 2028. Separately, Mayoral Capacity Funding will rise by £150m in 2027-28.
Any additional reflections?
Georgia Harris: Councils sit at the heart of the Government’s agenda, from delivering good growth to devolving power closer to communities, and the Budget leaves several questions for them to work through.
Reorganisation still has some way to go. On 29 October, the Government confirmed it is minded to proceed in five areas, subject to at least three weeks of further representations. Decisions in nine other areas were withdrawn, though the Government stresses this does not mean reorganisation has been cancelled there, and all 15 remaining areas are due an outcome by early 2027. The Prime Minister has acknowledged the challenge, describing reorganisation as “a nettle that’s got to be grasped”.
On homelessness, the Prime Minister’s Rough Sleeping Summit on 26 October brought together organisations working to offer everyone sleeping rough a route off the streets before Christmas, a recognition that funding alone will not be enough. The longer-term question is how those routes off the streets will be sustained into the new year and beyond.
The private rented sector is also worth watching. Higher tax rates on property income, combined with the new requirements of the Renters’ Rights Act, may influence whether some landlords stay in the market. That matters for tenants, and for councils that rely on private rented homes to house homeless households.
Leaseholders, meanwhile, will be looking for the Bill the Prime Minister promised “before Christmas”.