Last week, the Chancellor, Rachel Reeves, unveiled the government’s much-anticipated Spending Review, a pivotal moment for the UK economy that outlined funding priorities for the years ahead. While the headlines focused on major departmental allocations, a closer look reveals significant implications for the UK property sector, and crucially, for the often-overlooked small and medium-sized (SME) property developers who are vital to delivering the nation’s housing ambitions.
At Acorn.finance, we understand the unique challenges and opportunities faced by SME developers. Our analysis of the Spending Review indicates a landscape that, while still requiring careful navigation, offers renewed hope and concrete measures designed to empower smaller builders.
A Renewed Commitment to Housing: The Headline Figures
The Spending Review confirmed a substantial injection of capital into the housing market. Key announcements include:
£39 Billion for Affordable Homes
An unprecedented £39 billion has been committed to the Affordable Homes Programme over the next decade (2026-2036). This significant uplift, nearly double previous levels, is designed to provide long-term certainty for housing providers and developers, encouraging sustained investment and delivery.
Homes England's Expanded Role
Critically, an additional £10 billion in financial investment is being channeled through Homes England, specifically earmarked to unlock private capital for affordable housing. This is a game-changer, with Homes England actively looking to partner with and effectively act as an equity backer for SME developers to accelerate delivery.
Long-Term Rent Certainty
A new 10-year social rent policy (CPI + 1% from 2026) offers greater financial stability for social housing providers, which in turn boosts confidence in new development partnerships.
The SME Developer’s Advantage: Tailored Support on the Horizon
What truly stands out for SME developers in this Spending Review is the clear recognition of their crucial role. The government is actively “backing SME builders to get Britain building” through a series of targeted reforms:
Streamlined Planning
Minor developments (up to nine homes) are set to benefit from simplified planning rules and eased Biodiversity Net Gain (BNG) requirements, promising faster decisions by expert planning officers. A new "medium site" category (10-49 homes) will also see simpler rules and potential exemptions from the Building Safety Levy.
Dedicated Land & Funding
Homes England is poised to release more of its land exclusively to SMEs, providing much-needed access to viable sites. Furthermore, a new National Housing Delivery Fund, alongside £100 million in SME Accelerator Loans, aims to support long-term finance options like revolving credit facilities.
Reducing Bottlenecks
A £10 million fund is allocated to councils to recruit specialists, speeding up environmental assessments, while a £1.2 million PropTech Innovation Fund will champion technological advancements for small site delivery. The commitment to training 120,000 new apprentices, particularly in construction, also addresses vital skills shortages.
Navigating Development Nuances: Challenges Still Remain
While the optimism is palpable, it’s essential to approach this new landscape with a clear understanding of lingering challenges:
Viability Pressures
High interest rates and persistent construction costs continue to squeeze development viability, especially for schemes in areas with lower land values. Calls for a reduction in upfront costs and greater tax certainty are still loud within the industry.
Planning System Capacity
Despite new funding, local planning departments remain a bottleneck. The success of new reforms hinges on these departments having the resources to process applications efficiently.
First-Time Buyer Support
The absence of a dedicated government support scheme for first-time buyers continues to impact overall housing demand, which affects developer confidence.
Acorn.finance: Your Partner in Progress
The latest Spending Review signals a determined effort by the government to tackle the housing crisis and empower SME developers. For those ready to seize these opportunities, having the right financial partner is more critical than ever.
At Acorn.finance, we specialise in providing flexible, tailored finance solutions for SME property developers. We can help you:
Unlock Funding
Navigate the new funding streams and secure the capital needed for your next project, including leveraging opportunities with Homes England.
Optimise Viability
Our expertise helps you structure deals that account for market challenges, ensuring your projects remain profitable.
Accelerate Delivery
With efficient financing, you can move faster from planning permission to spades in the ground, taking full advantage of streamlined regulations.
The government has laid out its vision. Now it’s up to SME developers, supported by partners like Acorn.finance, to translate that ambition into bricks, mortar, and thriving communities across the UK.
Contact Acorn.finance today to discuss how we can help you capitalise on the opportunities presented by the latest Spending Review.
