Pegasus Group's Richard Cook says visible outcomes, not rhetoric, will show whether this Budget delivers for housing
The Autumn Budget contained a number of welcome measures for the housing and development sector, but whether they are enough to reverse years of stagnation is a question that will not be answered until 2027 at the earliest, according to Richard Cook (pictured top), Head of Economics at Pegasus Group.
Speaking to Mortgage Introducer following the Budget, Cook welcomed the government's direction of travel while cautioning against optimism that outpaces the data. "We can't rest on our laurels," he said. "More needs to be done to boost activity and provide greater clarity on the planning process, especially when it comes to the delivery of new homes."
Chancellor John Healey's first Budget included the Your First Home equity loan scheme, backed by £4.7 billion and designed to help around 70,000 households onto the property ladder with deposits as low as 2.5%. Stamp duty went unchanged, landlord income tax rates rose to 24% for basic-rate taxpayers, and swap rates – the benchmark that underpins fixed mortgage pricing – edged slightly lower on the day.
The full implications for mortgage brokers and lenders span first-time buyer support, buy-to-let pressure and near-term rate expectations. But behind the headline measures lies a deeper question about long-term housing supply.
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Confidence needs to be earned, not assumed
Cook’s test of whether the government has succeeded is straightforward. He wants to see sustained improvement in the data. Businesses need clarity and certainty from government, and crucially, they need it to last. "We don't like continuous change."
The Office for Budget Responsibility (OBR) forecast 1% growth in 2027 in its October 2026 Economic and Fiscal Outlook – a figure Cook regards as a floor rather than a ceiling. "You know the government's got a grip on it when we start to see better forecasts than that, and we actually start to see it translated into reality," he said.
Unemployment, which forecasters expect could rise above 5% in 2027, is another indicator that would need to turn before any genuine recovery can be confirmed. Transaction volumes across the north are rising faster than anywhere else in the country, pointing to an economic picture that remains uneven. Cook argued that money and appetite to invest are not in short supply. What is missing is certainty. "There is money there now, and people do want to invest. House builders want to build homes. Developers want to develop, particularly in the capital."
Planning viability remains the critical bottleneck
Cook was direct on the planning system, specifically the viability issues stalling major schemes in London. He cited the recent rejection of a Southwark scheme that would have delivered more than 1,300 apartments, despite receiving officer recommendation, as well as Berkeley Group – a London-listed housebuilder – pausing its Lewisham Shopping Centre proposal. Both are casualties of a system failing developers who are ready and willing to build.
He also pointed to the updated National Planning Policy Framework (NPPF) – the government's rulebook for planning decisions in England – as a welcome signal, but cautioned it would take time to bed in. What the system needs, Cook argued, is greater pragmatism – a willingness to compromise and work more flexibly in the interest of delivering more homes.
Pegasus Group's own research calculates that the draft London Plan, which proposes targets representing more than 300,000 fewer homes than the government's original figure, could cost the capital up to £41 billion in annual economic output. The gap between London and the regions has widened considerably in 2026, with supply constraints continuing to bite hardest in the capital. "If the London market is underperforming, then it's not going to be good news for the rest of the UK because it is such an important part of UK PLC," Cook said.
He was clear on the timeline. "The housebuilding stall has already started," he said, adding that one developer chief executive had suggested supply shortfalls would become visible as soon as 2027, 2028 and 2029. "It's actually not that far away."
The devolution opportunity – and its risks
The Budget's £1.5 billion devolution fund drew a cautiously positive response from Cook, who spent time in the research team at Greater Manchester Combined Authority before joining Pegasus Group. "I've seen firsthand where, if you give locally elected people such as a metro mayor the authority, they are probably far better placed than somebody 200 miles away to understand what's needed in the local area," he said.
His main caveat was consistency. He pointed to the Regional Development Agencies, which did good work before being abolished, as a cautionary precedent. "They're going down the devolution route now. Do not change it."
Resilience, but not yet recovery
Despite the challenges outlined, Cook struck a note of cautious optimism. “The UK economy has been very resilient over the last couple of years. A lot of people probably thought we’d be in recession now and we’re not. We’ve got a lot of the ingredients to be successful, it’s just over to the government now.”
He was equally clear on what progress will look like in practice. “Visible outcomes – such as planning approvals and construction starts – will go a long way to bolstering the housing market in Q4 2026 and into 2027.”
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