Cut stamp duty to reap £4bn windfall, Berkeley urges Healey
One of Britain’s biggest housebuilders has urged John Healey to slash stamp duty on newly built homes, in a move which it says would hand the Treasury a £4.2bn windfall.
In its Budget submission, London-listed Berkeley Group told the Chancellor that urgent action was needed to prevent the housing market from “sliding over an economic cliff edge”.
Berkeley said cutting the five per cent investor surcharge on new homes would unlock 30 per cent sales growth, handing the Exchequer £4.2bn, the Telegraph reported.
In recent months, housebuilders have ramped up pressure on the government to boost housing demand, warning that the soaring mortgage rates caused by the Iran war have battered market confidence.
Currently, the government charges a five per cent surcharge for investors in new-build rental homes. Berkeley told the Chancellor this levy is stifling investor appetite for new developments.
The housebuilder also asked the government to cap stamp duty at one per cent for first-time buyers and downsizers. Sector rivals Bellway and Barratt Redrow – and homes portal Rightmove – have previously called for urgent action on stamp duty.
Rob Perrins, the executive chairman of Berkeley, said in the group’s Budget submission: “Our position has always been that a stamp duty reduction on new-builds – especially around the investor surcharge, first-time buyers and downsizers – is the best and quickest lever.
“This is still needed alongside Your First Home to restart homebuilding in urban areas.”
‘Significant slowdown’ in home sales
Last week, Andy Burnham announced a new programme to offer first-time buyers equity loans to help them onto the housing ladder.
The government had been facing significant pressure to reinstate George Osborne’s Help to Buy scheme, which ran from 2013 to 2022.
Shares in leading housebuilders surged following the announcement of the Your First Home scheme, which analysts said would be a “big catalyst” for the sector.
But property experts have cautioned that this demand-side measure will do little to address the demand-side challenges facing housebuilders, with building costs having soared since the Iran war began.
Your First Home will not be enough to solve an “acute [housing] crisis, particularly in London,” Perrins told the Treasury.
Berkeley urged the Chancellor to address a “significant slowdown in the rate of new housing sales,” which have slowed by 56 per cent since 2022, to 8,840 last year.
The housebuilder said: “If the government wants to increase housing supply as measured against its high-profile commitment to deliver 1.5m homes this Parliament, there are few policy measures available with the potential to deliver such an immediate impact, whilst sticking to a tight fiscal envelope.”