Rural Context: The Chancellor’s Spring Statement

Chancellor of the Exchequer, Rachel Reeves, unveiled her Spring statement on March 26, introducing several measures that could have a significant impact on rural stakeholders and communities. While there isn’t a specific focus on rural, there are plenty of ways in which communities in rural areas could be affected.

Affordable and Social Housing Investment

The Government has committed to putting an extra £2 billion into social and affordable housing for 2026–27. This is part of a bigger plan to deliver the ambitious housebuilding target of 1.5 million homes in England by 2029.

The funding aims to support the delivery of up to 18,000 homes, focusing on areas with development-ready sites, mainly urban. However, with Ministerial approval the governments agency Homes England has recently quietly dropped its rural delivery target of 10% to just 5%, so based on this only 900 of the homes to be funded by the £2b announcement are likely to help tackle the acute affordability challenges that rural communities face. The upcoming Spending Review in June 2025 still offers no certainty that the government will provide support for rural housing providers and the low-income households that they seek to help.

Planning Reform and National Planning Policy Framework (NPPF)

There have been significant changes to the NPPF, including bringing back mandatory housing targets and modernising Green Belt policy to include low-quality “grey belt” land. These changes are expected to result in 170,000 additional homes by 2029–30, marking the biggest housebuilding increase in decades.

This could potentially lead to a 30% increase in annual housebuilding and while these reforms are national, they could help unlock development in rural settlements, where planning constraints have long limited supply. This will only happen at scale if the government seeks to better support planning policies that directly aid rural communities, such as the Rural Exceptions Site Policy. The government has suggested that this may happen, as it further looks at National Development Policies.

Planning and Infrastructure Bill

The new Planning and Infrastructure Bill aims to streamline planning consents, including for cross-boundary and strategic sites. It also seeks to provide faster and more certain consenting processes and unlock land for housing and infrastructure.

This could prove beneficial for rural authorities, which are often under-resourced and constrained by fragmented land holdings and planning frameworks.

Skills Investment for Housing Delivery

The Spring Statement confirmed a £625 million construction skills package, which includes 60,000 additional skilled workers, £100 million for Technical Excellence Colleges (one in each region), and bootcamps and apprenticeships aimed at drawing new entrants into the construction industry.

These measures could potentially support rural housing delivery, where labour shortages are often more acute. This investment in skills development could provide significant opportunities for rural upskilling and employment.

To fully capitalise on the opportunities that arise from this approach, the government will also need to nurture SME builders, who typically develop smaller sites like those used to deliver affordable rural housing. This focus on skills alongside greater small site provision following changes to the National Planning Policy Framework last year, presents a unique opportunity to grow the SME building sector.

Local Authority Funding and Development Incentives

Funding is being made available to housing associations and local councils to bring forward bids for new developments immediately. This may assist rural councils in de-risking and accelerating smaller schemes, providing much-needed support for rural housing projects.

Building Safety Levy

A new Building Safety Levy, coming into effect from October 2026, will apply to most new residential developments but will exempt affordable housing and small rural sites (fewer than ten units).

This is a positive measure for small rural developers and housing associations, maintaining scheme viability and ensuring that rural communities can continue to benefit from new housing developments.

Future Outlook: Long-Term Housing Strategy & New Towns

A Long-Term Housing Strategy is expected later in 2025, with details on further investment and locations of new towns to be confirmed. While the possibility remains for rural garden village-style settlements, no specific rural prioritisation has been indicated yet. However, the upcoming Spending Review in June 2025 will be critical in determining whether this momentum translates into sustained, targeted support for rural affordable housing.