Why the 2025 Autumn Budget Must Back Construction and Housing Growth
London’s construction and housing sectors sit at the core of the UK’s economic engine, driving productivity, employment and innovation across the country. Yet despite generating nearly £50 billion in annual fiscal surplus, the capital’s ability to build and grow is being constrained by mounting pressures in housing delivery, infrastructure investment and local authority funding.
As the 2025 Autumn Budget approaches, the message from London’s boroughs is clear: sustainable national growth depends on construction-led investment in the capital.
Housing remains the most urgent challenge. High costs and limited supply have pushed one in four London households into poverty, while boroughs now spend £5 million each day on temporary accommodation. This growing financial strain undermines local regeneration and slows the pace of development. For contractors, consultants and developers, it translates into fewer opportunities, delayed projects and uncertainty across the supply chain.
Strategic investment in transport-led regeneration could shift that balance. The proposed DLR extension to Thamesmead Waterfront, the Bakerloo Line upgrade and the West London Orbital could together unlock over 60,000 new homes, creating new development zones, jobs and long-term economic uplift. The Thames Estuary Growth Board projects these initiatives could add £190 billion to the national economy by 2050, with Thamesmead emerging as a major construction and innovation hub for South East London.
Fiscal reform is another critical enabler. Allowing London to introduce an overnight accommodation levy and expand land value capture, tools successfully proven at Nine Elms, where 20,000 new homes and 25,000 jobs are being delivered, would empower boroughs to reinvest directly in infrastructure and housing, without relying solely on central funding.
Equally vital are policy updates to rent convergence, housing benefit caps and Local Housing Allowance. Removing outdated restrictions would improve affordability, encourage investment in social housing and ease homelessness pressures, all of which feed directly into construction demand. The push for Net Zero Neighbourhoods could further unlock more than £2.5 billion in private retrofit funding, modernising existing housing stock and generating green construction opportunities across London.
Construction thrives on stability, and stability depends on a properly funded, empowered local government. The 2025 Autumn Budget is a chance to restore both. By backing housing, transport infrastructure, and local financial autonomy, the government can unleash London’s full building potential and lay the foundations for growth that benefits the entire country.
As the 2025 Autumn Budget approaches, the message from London’s boroughs is clear: sustainable national growth depends on construction-led investment in the capital.
Housing remains the most urgent challenge. High costs and limited supply have pushed one in four London households into poverty, while boroughs now spend £5 million each day on temporary accommodation. This growing financial strain undermines local regeneration and slows the pace of development. For contractors, consultants and developers, it translates into fewer opportunities, delayed projects and uncertainty across the supply chain.
Strategic investment in transport-led regeneration could shift that balance. The proposed DLR extension to Thamesmead Waterfront, the Bakerloo Line upgrade and the West London Orbital could together unlock over 60,000 new homes, creating new development zones, jobs and long-term economic uplift. The Thames Estuary Growth Board projects these initiatives could add £190 billion to the national economy by 2050, with Thamesmead emerging as a major construction and innovation hub for South East London.
Fiscal reform is another critical enabler. Allowing London to introduce an overnight accommodation levy and expand land value capture, tools successfully proven at Nine Elms, where 20,000 new homes and 25,000 jobs are being delivered, would empower boroughs to reinvest directly in infrastructure and housing, without relying solely on central funding.
Equally vital are policy updates to rent convergence, housing benefit caps and Local Housing Allowance. Removing outdated restrictions would improve affordability, encourage investment in social housing and ease homelessness pressures, all of which feed directly into construction demand. The push for Net Zero Neighbourhoods could further unlock more than £2.5 billion in private retrofit funding, modernising existing housing stock and generating green construction opportunities across London.
Construction thrives on stability, and stability depends on a properly funded, empowered local government. The 2025 Autumn Budget is a chance to restore both. By backing housing, transport infrastructure, and local financial autonomy, the government can unleash London’s full building potential and lay the foundations for growth that benefits the entire country.
