Budget 2025 reaction round-up: relief at landfill tax u-turn and scrapping of two-child benefit cap

Housing leaders have been reacting to this afternoon’s budget.

Rachel Reeves today set out her long-awaited spending plans, which included scrapping the two-child benefit cap and a raft of tax rises.

The chancellor’s decision not to proceed with the move to a single rate of landfill tax was welcomed by the sector. The move, proposed in a consultation paper, had caused concern about the impact on viability of housing schemes.

Gavin Mason, operations director at multi-disciplinary consultant Pick Everard, said: “The decision to scrap the single-rate Landfill Tax overhaul is a vital win; by preventing a £15,000 per home cost hike, the government has not further challenged financial viability on brownfield sites.”

Several social landlords welcomed the move to scrap the two-child benefit cap.

Andy Hulme, chief executive of Hyde Group, said: “This is the right thing to do at a time when more than 4.5m children are estimated to be living in poverty and 1.6m children are affected by the two-child benefit cap.”

Hulme also responded to the government’s decision to delay a decision about the shape of rent convergence until January.

“We will continue to engage with government to advocate for rent convergence to be reintroduced at £3 a week to provide further resources over the next decade to invest in customers’ homes and to help build new affordable homes.”

Paul Dolan, chief executive of Riverside, welcomed the extra £1.5bn in capital investment to tackle fuel poverty through the Warm Homes Plan.

However, he added: “We are disappointed that no funding for supported housing has been announced. We are deeply concerned about the perilous state of supported housing and homeless prevention services such as floating support. Last year, one in three supported housing providers had to close schemes because of funding pressures.”

Dolan’s comments were echoed by Kate Henderson, chief executive of the National Housing Federation.

Henderson said: ”It is disappointing not to see any funding announced for supported housing, with many schemes closing across the country due to years of cuts and rising costs. We will work with the government to protect this vital resource.”

Graeme Anderson, chief executive of BDHT, also welcomed the scrapping of the two-child benefit cap and the Warm Homes Plan funding but said he was “disappointed” by the lack of clarity today on rent convergence.

He said: “The announcement of £48m for 350 new planners within the wider planning reform is another important move. We hope this will result in greater pace, allowing projects to move from concept to construction more quickly.”

Mark Perry, chief executive of Vivid: “It is disappointing the government didn’t acknowledge the sector’s call to raise local housing allowances given the pressures record high rents are having for many people today.”

Andrew Usher, group managing director of Places for People Developments, said: “Creating fluidity through reforms to council tax and the newly proposed ‘mansion tax’ may encourage more people to consider ‘rightsizing’, but policy can’t focus on individuals’ finance alone. Housebuilders need both the support and financial capacity to deliver the wide variety of homes that meet people’s needs.”

Jonathan Layzell, chief executive at Stonewater, urged the government to prioritise publishing the Warm Homes Plan. He added: “We continue to ask the Treasury to ringfence a proportion of the Social and Affordable Homes Programme funding for rural locations where existing large-scale models simply do not work.”

Catherine Ryder, chief executive of Placeshapers, said: “Measures to ease the cost-of-living crisis, removing the two child benefit cap and initiatives aimed at strengthening employment prospects are all welcome steps that will help reduce the pressures that many households are facing. However, we remain concerned that the freeze to the Local Housing Allowance is pushing people in private rent into unnecessary hardship.”

Some were concerned about the what they saw as the lack of measures to boost housebuilding.

John Anderson, group chief executive of Allison Homes, said: “Disappointing to see so little in today’s Budget that will meaningfully support the UK housing market. For an industry that is central to economic growth, social mobility and community stability, there was a real opportunity for reform that could have helped thousands of people take their first step onto the property ladder.”

Melanie Leech, chief executive of the British Property Federation, said, “There wasn’t a single thing said in the Chancellor’s speech that wasn’t leaked in its chaotic build up. However the lack of surprises doesn’t hide the disappointment that many in the development industry will feel after today. Whilst she spoke positively about the importance of business investment and maintained full expensing and the headline rate of Corporation Tax, there was little to cheer from an investor perspective. “

Paul Rickard, chief executive at Pocket Living, said: “The positive planning reforms will take time to materialise and a marked increase in housebuilding is only currently expected to take place from 2027/28. It is therefore imperative that all steps are taken to remove the current barriers to delivery, including tackling the issue of viability.”