Budget 2026 for Property Developers: Funding, Viability and Where the Opportunities Are

By the Commercial & Property Finance Team at Acorn.finance | Published 29 October 2026

Key points

An extra £1.5 billion for social and affordable housing, reported as delivering about 10,000 homes.
VAT relief on land sold to registered social housing providers.
Biodiversity net gain no longer applies to residential brownfield sites of up to 1.5 hectares in England.
No further building regulations this Parliament, unless needed for safety.
Viability, the cost of building against what homes sell for, was largely unaddressed.

What was announced

Social and affordable housing. An extra £1.5 billion for the Social and Affordable Homes Programme, allocated from 2027-28 and reported as delivering about 10,000 homes, taking total funding to more than £40 billion over ten years.
VAT on land. Land sold to registered social housing providers will be VAT-relieved to speed up delivery.
Brownfield. Residential brownfield sites of up to 1.5 hectares in England are exempt from biodiversity net gain requirements.
Regulation. No further building regulation changes this Parliament, other than for safety.
Regional growth. New Good Growth Funds for mayors and strategic authorities. Mayors will receive 20% of business rates revenue from next year, a share of income tax from 2028, and all business rates are to be retained locally by the end of the decade.
Public finance. The National Wealth Fund and British Business Bank receive an extra £20.4 billion over four years.
Demand. The Your First Home scheme supports new-build sales in England from spring 2027.

The catch: viability

Housebuilders called the Budget disappointing because it did not tackle viability. The Office for Budget Responsibility expects 190,000 fewer net additions to the housing stock than in its March forecast, and says Your First Home will have only a marginal effect on supply.

Industry voices agree on the problem:

Vistry's chief executive Adam Daniels said the wider housing agenda is at risk unless viability is urgently addressed.
Pocket Living's chief executive Paul Rickard said most of the country is seeing almost no new homes delivered, and called for a distinct regime for smaller builders.
The OPRE Group's Brian Welsh said the lobbying to reinstate multiple dwellings relief for build-to-rent had not been heeded.
Barratt London's Craig Carson welcomed the building regulations pause as certainty that could turn into investment.

Where the opportunities are

Small brownfield sites. The biodiversity exemption and regulatory stability could improve appraisals on residential schemes of up to 1.5 hectares.
Refurbishment and conversion. Ridge's Andrew Stanford expects investors to focus on refurbishing existing buildings to achieve their returns, and says understanding what can be adapted, the costs and timescales will be crucial. See our guides on Class MA conversions and title splits.
Social housing partnerships. VAT-relieved land sales and more programme funding may widen the buyer pool for completed units.
Brownfield funding. Shawbrook's development finance head Terry Woodley said the biodiversity change would be well received by developers, and MT Finance's Joshua Elash said specialist finance has an important role in building on market momentum.

What it means for funding

Higher taxes on banks and property income may add to lending costs, as ASK Partners' Daniel Austin warned. Development finance, mezzanine, exit bridging and refinance remain the tools for recycling capital between sites. Lenders will look closely at your appraisal, costs and exit, so stress-test them.

Review your numbers first. Before you commit to a site, check the residual land value. Review our residual land value guide

Related guides: Class MA bridging finance and title splitting.

What to do now

Re-run your appraisals with the new brownfield and VAT position.
Stress-test build costs, sales values and timelines.
Line up exit finance before you complete on a bridge.
Talk to us early about how your scheme is funded.

FAQs

Does biodiversity net gain still apply to my scheme? It no longer applies to residential brownfield sites of up to 1.5 hectares in England. Larger and non-brownfield sites are unaffected.

Does the extra £1.5 billion help private developers? Indirectly. It supports social housing delivery and may widen the buyer pool for completed units.

Did the Budget change stamp duty? No.

Sources

Budget 2026: What It Means for Pubs, Business Owners, Landlords, Homebuyers and DevelopersA steady Budget, not a game-changer: real gains, real costs and a lot of small print.Budget 2026 for Pubs: Rates Relief Rises to 35%, but Is It Enough?Pub rates relief in England rises from 15% to 35% from 1 April 2027.Budget 2026 for Business Owners: Capital Allowances, BADR and Founders' ReliefThe Business Asset Disposal Relief lifetime limit halves from £1 million to £500,000 for disposals on or after 6 April 2027.Budget 2026 for Landlords: Property Income Tax Rises, and Why Incorporation Deserves a LookFrom 6 April 2027, individual landlords pay property income tax at 24%, 44% and 49%.Budget 2026 for First-Time Buyers: Your First Home, the LISA Change and the New ISAYour First Home offers a government equity loan of up to 20% on new-build homes in England, from a 2.5% deposit.

Discuss your plans

Speak to an Acorn.finance broker about how the Budget affects your finance plans.

0207 959 3882

This article is general information based on the Budget document and published reporting as at 29 October 2026. Details may change as legislation is published. Acorn.finance does not provide tax or legal advice. Take advice from a qualified accountant or solicitor before acting. Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured against it. Finance is subject to status and lender criteria.