Spending review 2025 | Industry reactions

Chancellor Rachel Reeves described the Labour government’s spending review as heralding “national renewal”. Providing some forward-planning certainty for housing might be its most important element, according to experts from across the North.

There were few surprises in Reeves’ spending review statement in the House, with most of the big announcements trailed over the preceding week, such as the £15.2bn investment in regional transport and the boost for the Affordable Homes Programme released in the hours leading up to the statement.

A promise to overhaul Green Book spending rules was one of the new elements set out by Reeves. That has gone down well in market reactions gauged by Place, along with the commitment to affordable homes over a decade, giving providers and the supply chain confidence.

Comments have been edited for clarity and brevity

The view from civic leaders

Liverpool City Region Mayor Steve Rotheram said: “This Spending Review sets the right tone – and the right priorities – for the road ahead. At a time when tough choices have had to be made, the chancellor has clearly recognised the value of investing in the parts of the country with the greatest potential and the strongest record of delivery.

“That’s a real vote of confidence in places like the Liverpool City Region, and in the role that mayors can play as the delivery arm of government. We’re ready to hit the ground running and I look forward to working closely with ministers to make the most of what’s been set out today.”

Offering the LCR as a national pilot for the new approach, Mayor Rotheram described the Green Book changes as a “landmark moment” saying that “for too long, the rules governing public investment have tilted the playing field against areas like ours”.

South Yorkshire’s Mayor Oliver Coppard said: “There’s some good news, but still work to do. I was pleased to see the Chancellor reconfirm her support for our plans to reopen Doncaster-Sheffield Airport. With the government’s backing, we’ll take a final decision in summer.

“The chancellor also reaffirmed the government’s support for defence, offering a vote of confidence in South Yorkshire as a leading defence cluster. Announcements on health, education and training will also make a big difference to communities across Barnsley, Doncaster, Rotherham and Sheffield.

“We’ve not seen the whole picture today. Next week, we’ll hear about the government’s plans for infrastructure, and I’ll be looking for a response to the proposals we put forward through the White Rose Agreement’s Yorkshire’s Plan for Rail, and support for some of our key industrial strengths, including our steel and hydrogen sectors.

“Overall, this is good news. We’re finally beginning to see the type of investment we’ve been denied for too long; a rebalancing of our economy and long-term commitments to addressing the challenges that hold our economy back.”

Cllr Bev Craig, Leader of Manchester City Council, said: “We particularly welcome the announcement of £39bn extra funding nationally for council, social and other genuinely affordable homes. We’re already delivering more affordable homes than at any time in the last 15 years and this will allow us to go even further in delivering this generational increase.

“It’s welcome to have an increase in spending for local councils, and I will look forward to the local government settlement to see what this means for places like Manchester who had our budgets cut heavily by governments since 2010.

“Following last week’s transport news, we also welcome the commitment to investing in our railways and other infrastructure – the sort of long-term strategic thinking which is vital to address years of underinvestment.”

What it means for business

Richard Whitehead, chief executive for Euorpe and India at Aecom, said; “This review provides greater long-term visibility on spending priorities than we have had for years. If realised, these commitments will deliver transformative change for the UK.

“We now await the 10-year infrastructure strategy next week to drive investment and provide further clarity. Crucially, we need details on the next generation of public-private partnerships to fund much-needed projects in sectors such as energy and defence, as part of a stable infrastructure pipeline.”

Stuart Howie, managing director (Leeds) and head of regeneration at Avison Young UK, said this delivered “a strong signal of intent to invest in much-needed infrastructure that will drive long-term economic resilience”.

He continued; “For Yorkshire, it puts improved connectivity at the heart of our region’s growth agenda. The £2.1bn confirmed for a new mass transit system in West Yorkshire and £1.5bn in South Yorkshire for public transport upgrades, including a new fleet of trams and franchised buses, will be a game-changer.

“And the £3.5bn pledged to be invested into the TransPennine rail route will significantly improve Leeds’s intercity connectivity, not only enhancing mobility between our cities and towns, but also helping to unlock enormous economic potential.”

Neil Walmsley, regional director UK/Europe at Hatch, said: “The government has listened to strong messages about the Green Book. It has accepted the need for place-based business cases and will work with regional and local government and through a new taskforce to develop the approach. It has acknowledged it is too complicated and needs to be simplified, and that it needs to be much better able to capture the long-term transformational and wider benefits of projects than the current edition.”

Danny Hope, regional director at Stantec, said: “‘Renewal’ was of course the stand-out term peppered throughout the spending review, and it’s certainly reassuring to see the North of England featuring heavily.

“Connectivity and better transport links make regional growth and renewal possible so it’s welcome news that the ‘Northern Powerhouse’ rail link looks set for a long-awaited green light. This, alongside the billions earlier committed to public transport, is vital and will create a more mobile labour market.

“The significant cash injection into social and affordable housing, as well as further investment into the NHS and clean energy are all positive for communities. As we welcome further detail around Plans for Neighbourhoods and Growth Mission Funds, we look forward to supporting these efforts.”

Patrick Hickey, director of development consultancy Make NW, said: “This is a build-to-save spending review. By announcing £113bn of new capital investment, and only increasing day-to-day spending by 1.3%, the chancellor is signalling that now is the time to back the builders to construct the next generation of housing, infrastructure and property and defence assets which Britain desperately needs.

“The government’s new affordable housing programme is a positive signal — but the effectiveness of the grant will depend entirely on how it’s applied on the ground.

“A ‘one size fits all’ approach to viability won’t reflect the complex landscape across the North. To truly deliver, funding must be sensitive to these local conditions and target support proportionally to need. That’s the kind of responsive, intelligent approach the Mind the Gap campaign has consistently championed.

“Now we are also keen to find out more about the detail of how this funding will be delivered. How is the new AHP funding going to be split between social rent, affordable and shared ownership? Will funding for the AHP be front loaded to help kickstart delivery In this Parliament?”

Colin Sinclair, chief executive of Knowledge Quarter Liverpool, said: “Liverpool is already home to a world-leading cluster of health and life sciences innovation, so the announcement that we will receive a share of the £22bn annual investment into regional science and tech clusters is music to the ears of those in the city region who recognise its potential for significant future growth.

“We must also hope that the funding support for the new Liverpool-Manchester line not only heralds the start of a generational transport project that will better connect Liverpool with the rest of the country, but also signals a shift towards greater capital investment in the North, underpinned by plans to review the Green Book approach.”

Justin Carty, executive director in residential investment advisory at CBRE, described the £39bn for affordable homes as a “much-needed injection” adding that “alongside the announcement of a long-term rent settlement, this should be the catalyst for unlocking and driving forward affordable housing delivery”.

Chris Acton, chief executive of Clancy Consulting, said: “The Chancellor’s Spending Review is a clear signal: infrastructure is firmly on the agenda for this government. The £15.6bn earmarked for transport outside London is a real opportunity to reshape connectivity across the long under-served North.

“As ever, intention is welcome but delivery is key. We’ve seen bold infrastructure promises from governments before, so what matters most is execution. Reeves’ well-documented commitment to streamlining planning processes to get spades in the ground quickly must be backed by local authority support and industry capacity.

“If followed through, these infrastructure plans could help to rebalance the UK economy in our regions, which are ripe with potential. For consultants, contractors and policymakers alike, the challenge now is to turn intent into impact, through collaboration, speed and long-term thinking.”

Paul Cherpeau, chief executive of Liverpool Chamber, said: “The proposed Liverpool-Manchester rail line, combined with further investment in the Transpennine route, offers an excellent opportunity to maximise connectivity if it better connects our key strategic transport assets, including Liverpool John Lennon Airport.

“That can also boost our attractiveness as an investment destination. We have long-standing challenges with regards to movement of freight, so the plans must seek to address those issues. Ten years after the promise of Northern Powerhouse Rail, then the subsequent failed HS2 plans, there is understandable scepticism. Learning the lessons of HS2, it’s important to ensure local engagement and leadership is at the heart of projects.

“The revised ‘Green Book’ methodology is a welcome step towards expanded government investment outside the South East and a more authentic understanding of value for money. The Chamber looks forward to working with our public sector partners, transport operators and member businesses to ensure the economic benefits to our city region are fully realised.”

Dr Lee Elliott, head of global occupier research at Knight Frank, said: “The spending review fires the starting gun on a new investment cycle – with big business poised to benefit from £113bn in capital spending, including funding for transport, housing, defence and nuclear. The headline commitments send a clear signal on growth and national renewal.

“Defence contractors, infrastructure firms and clean tech players will see opportunity in the detail. But with day-to-day departmental budgets rising just 1.2% in real terms, tax policy left hanging, and a volatile global environment defined by trade tensions and supply chain fragility, the long game remains uncertain. Delivery risk, payment delays and fiscal tightrope-walking could blunt private sector confidence. The government is betting big – but business knows the balance sheet still bites.”

Angela Mansell, managing director at Mansell Building Solutions, said: “This feels a lot like the 1.5m homes pledge: headline-grabbing promises, light on the detail.

“It all sounds good on paper – but once again, we’ve got the what, without the who, where, when, why or how. In construction and manufacturing, we know the reality; If there’s no clarity on who’s delivering, nothing moves; if we don’t know where or when, we can’t build teams or order materials; If it’s all based on five-year political cycles, there’s no time to develop skills or confidence.

“What we really need is 25 years of pipeline, not five years of promises. Continuity = confidence. That’s what unlocks productivity, innovation, training, and real impact.”

A big day for housing? 

Bronwen Rapley, chair of housing association alliance Homes for the North, said: “The announcement of billions of pounds of investment in the North’s transport infrastructure represents a clear long-term commitment to Northern growth and will enable new housing opportunities. This has been a strategic priority for Homes for the North, and we are delighted to see the government’s alignment with this goal.

“With this spending review settlement, we can fast-track the development of affordable, sustainable homes, breathe new life into communities, and help drive the inclusive growth the government rightly champions. We look forward to continuing our work to turn these ambitions into lasting change for the North.”

Sarah Rowe, partner and head of social housing at law firm Freeths, said: “What has been announced today is a 50% uplift on the size of the previous programme and for the first time in living memory will provide 10 years of certainty. This alongside the rent settlement at CPI+1% for the same period is the long-term reliable subsidy that the sector has been calling for, for a long time.

“The devil as always will be in the detail in terms of grant rates, whether there will be a focus on social rent, where the shortage is acute, or any monies available for Section 106 units where the market is in dire straits which is ultimately having a knock-on effect to the overall delivery of housing.

“The hard work begins now. Securing the partnerships needed to support the delivery afforded by the Affordable Homes Programme will be key to this.”

Peter Jackson, managing director of Seddon Housing Partnerships, said the announcements would provide “welcome relief” across housing. He continued: “By committing to a decade of stable, reliable, new build funding through the Affordable Homes Programme and potential rent increase at CPI plus 1%, the government is providing the right foundations for delivery.

“The £3.9bn a year for the next 10 years is nearly doubling the investment from the last programme, allowing housing providers to properly plan for the long term with confidence that the money is available.

“Seddon is now calling for a National Task Force to be formed to help resource development. If housebuilding is to scale up, more skilled people are needed to ensure delivery. We are ready and willing to collaborate and focus on what’s important – alleviating housing waiting lists, upskilling the next generation and future-proofing existing homes.”

Nicholas Harris, chief executive of Yorkshire social housing provider Stonewater, said: “It is reassuring to see the increase in funding for the AHP. This programme has allowed Stonewater to deliver hundreds of homes across Yorkshire and will enable the delivery of much-needed affordable homes for years to come. Support for new housing must continue to give providers like us the ability to plan, invest in developments and deliver for communities.

“We await to hear more details of any funding of the Warm Homes Social Housing Fund, but welcome the reassurance that the Government still values the positive impact that retrofit projects have made to customers’ lives.”

Brian Berry, chief executive of the Federation of Master Builders, said: “The chancellor’s commitment to social housing needs an accompanying delivery strategy that puts SME builders at its heart.

“Small, local firms are uniquely positioned to unlock the potential of overlooked small sites, deliver high-quality homes, and boost local economies. By working in partnership with housing associations, SMEs can also help tackle the industry’s skills gap by training and employing people in their own communities.”

Paul Dolan, chief executive of housing association Riverside, said: “This is a historic and groundbreaking funding settlement for social landlords, one that was desperately needed and will give Riverside and the wider sector greater certainty over funding throughout the next decade.

“We are pleased to see that the Chancellor has agreed a ten-year index-linked rent settlement. Rent certainty is critical for us to be able to invest in our homes and services, now and into the future.

“The AHP marks a major step in boosting the amount of social housing which is crucial if we are to cut the record number of homeless families living in temporary accommodation.”

Stephen Sorrell, social partnership director at Preferred Homes: “The significant new money announced today and extension of the Affordable Homes Programme will be transformative for registered providers bringing forward long-term pipelines across the North of England.

“With our first scheme open in south Leeds, we are working closely with Homes England as an Investment Partner to ensure extra care housing providers like Preferred Homes can continue to deliver in areas of need. Supported affordable housing which brings social care provision under the same roof will ultimately save money for local authorities and the NHS.”

Ellie Philcox, director, Euan Kellie Property Solutions, said: “The message we hear time and again from clients is that viability is a major blockage for unlocking brownfield sites. So, spending review commitment to provide additional Homes England funding to unlock housing sites is hugely encouraging.

“We look forward with anticipation to seeing the trickledown effect of this across the various affordable housing schemes we’re advising on.”

Tim Heatley, co-founder of developer Capital&Centric – busy across the North – and also chair of the Greater Manchester Mayor’s Charity, said: “This is a welcome move and shows real intent from government to get to grips with the housing crisis. Scrapping the Vagrancy Act, investing in affordable homes, and prioritising prevention are all steps in the right direction. But this should be the start of the journey, not the destination.

“We need to keep pushing for long-term solutions that truly break the cycle of homelessness – getting people off the streets and into permanent, high-quality homes with the support they need to rebuild.

“The Mortgage Guarantee Scheme will help more first-time buyers get on the ladder, but my concern is that without boosting supply at the same pace, it risks just fuelling demand and pushing up prices. If this is paired with genuine delivery of new homes in the places people actually want to live, then it can be a powerful catalyst for change.”