Housebuilder Berkeley Group has called on the Government led by Prime Minister Andy Burnham to introduce a 1% stamp duty cap for first-time buyers and downsizing homeowners, and to remove the current 5% investor surcharge, as part of what it describes as “urgent reform” to support property demand.
The FTSE 250 company said the current stamp duty regime, introduced when interest rates were at 0.25%, now acts as a “binding constraint” on the housing market, particularly as rates have returned to more normal levels. Berkeley added that it is still “receiving good and stable levels of inquiries” but acknowledged that uncertainty and volatility in the UK housing market have made customers without an immediate need to move or readily available funds “more cautious to commit” to house purchases.
Call for urgent reform to meet housing targets
In a statement, Berkeley said: “To meet the Government’s target of 300,000 new homes per annum, and help address the cost-of-living crisis by making homes more affordable, the current stamp duty regime, that was introduced at a time when interest rates were 0.25%, requires urgent reform.”
The company added: “What was a manageable frictional cost when interest rates were at those unique and unsustainable levels, has become a binding constraint, now that interest rates have returned to more normal levels.”
Berkeley also stated: “Collectively, this supports people buying their first home, frees up more family homes, and provides more homes for rent.”
Housing Secretary acknowledges target risk
Housing Secretary Angela Rayner, who returned to the role after Mr Burnham became prime minister, acknowledged for the first time on Sunday that she could miss the 1.5 million homes target. Speaking to the BBC’s Sunday with Laura Kuenssberg, Rayner said: “It’s a slim chance, but I’m definitely not giving it up. I think it’s really important that we keep a target that it was always a stretch target.”
Rayner said Burnham’s main focus was now on building council houses, suggesting that was taking priority over efforts to increase the overall target. “The prime minister wants us to make sure we’re building council houses. He’s made that absolutely, fundamentally clear,” she said.
She also highlighted the recent announcement of £10bn into a social and affordable homes programme and noted that home starts were up by 15% last year. “We are making a difference,” she said, “but the headwinds that are coming our way internationally and through those construction costs are having a negative effect on that target.”
