Spring Forecast 2025 Wish List: Property & Construction

The threshold above which first time buyers are required to pay SDLT was temporarily increased on 23 September 2022 from £300,000 to £425,000. This increase is scheduled to come to an end on 31 March 2025. First time buyers find it increasingly difficult to get onto the housing ladder and are priced out of many areas. There are fears that reducing the SDLT threshold back to pre-September 2022 levels will cause house sales to stall. The Government should extend the increased SDLT thresholds beyond 31 March to support the housing market.

Realistically, scrapping the increase is not likely to happen, but it’s expected to add an estimated 0.75% to 1% to construction costs according to market reports. Although this doesn’t seem like a large increase, when taken together with forecast inflation, the BCIS building forecast predicts that building costs will increase by 17% over the next 5 years. These costs will have to be passed on, making construction projects more expensive and potentially increasing the cost of new homes. Scrapping the increase would help to control price increases.

Architect firms are struggling to recruit and have warned that this may have an impact on the Government’s target of building 1.5m more homes. Architecture was removed from the visa shortage occupation list last year and the minimum salary required to get a visa increased from 26,000 to £45,900. Architect firms who train overseas graduates are having to let them go once they finish training as they can’t afford to offer them full-time roles. This is leaving a skills gap in the sector. The Government should review the minimum salary requirement for visas and set this at a more reasonable level, so firms can retain international graduates.

The construction sector is facing significant skills shortages in trades such as plumbing, electrical and carpentry. The Government should increase funded training and apprenticeship programs, and vocational education programs to help address the gap.

The Government made a series of announcements on infrastructure plans in December 2024. These include “taking the breaks off planning” and increasing public spending on infrastructure. This all sounds promising and if successful will help maintain demand for construction services. Unfortunately, there have been decades of under investment and a poor track record of delivering infrastructure projects within budget. The Government needs to set out clear plans on its priorities for projects and work with investors and the supply chain to ensure infrastructure projects are delivered efficiently, especially when public finances are tight.