Housebuilders call for urgent stamp duty cut

Three of Britain’s biggest housebuilders have called on Chancellor Jeremy Hunt to reduce stamp duty on property purchases in the Spring Budget to “unlock” the UK’s housing supply and boost the economy.

Jennie Daly, director of FTSE 100 builder Taylor Wimpey, said in an exclusive interview with The Mail on Sunday that there was a “real case” for reducing the tax on lower-priced properties and sellers over 60 looking to reduce the size.

His comments were echoed by the chief executives of Barratt Developments and The Berkeley Group.

The pressure on the Government to help boost demand comes after the housing market has been hit by rising interest rates, which have raised mortgage and rent payments at a time when budgets of households have been affected by the cost of living crisis.

Many would-be homebuyers have been priced out of the market due to prohibitive mortgage costs and deposit levels, although there are hopes the situation is starting to improve.

Speaking to The Mail on Sunday, Daly said stamp duty reform could help address the problem of “overpopulation at the bottom end of the market and underemployment at the top end”.

She said: ‘House moves boost the economy. Mobility is of fundamental importance for a healthy economy.

‘When this becomes more difficult because there is a tax such as stamp duty or the lack of availability of housing, then the economic options of the individual and the economy begin to be limited. We have to consider the dampening effect that stamp duty has.’

Property purchases under £250,000 do not attract stamp duty, but it is charged at 5 per cent of the next £675,000 for homes from £250,001 to £925,000. It then increases to 10 per cent up to a maximum rate of 12 per cent on top of £1.5 million.

First-time buyers pay no stamp duty on properties under £425,000 and face a 5 per cent charge on homes between £425,001 and £625,000.

Rob Perrins, boss of housebuilder The Berkeley Group, said the stamp duty cuts would “help meet consumer demand” and encourage more people to move. But he stressed that housing supply remained the “key issue” and reiterated the company’s calls for “targeted, cost-neutral tax incentives” for construction on brownfield or post-industrial land.

David Thomas, chief executive of Barratt Developments, said the Chancellor should use next month’s Budget to “support young families to get a foot on the ladder” as well as “incentivize downsizing” to boost house sales. and make “more efficient” use of existing stock.

MJ Gleeson, a low-cost housing provider, also backed calls for changes to stamp duty.

Chief Graham Prothero said removing or reducing the tax would “help stimulate confidence and activity in a very tentative market”.

Builders hope the reform will help revive the house-buying boom sparked during the pandemic after Rishi Sunak introduced a stamp duty holiday while chancellor. The policy, which meant stamp duty stopped applying to properties costing less than £500,000, boosted demand after the property market ground to a halt during Covid lockdowns. But the move was criticized for driving up prices and scaring away younger, first-time buyers.

Last month, former Housing Secretary Robert Jenrick called stamp duty “one of the most counterproductive and anti-growth taxes” and said it “damages productivity”.

He called for a reduction in stamp duty and said this would provide “a much-needed stimulus to the economy”.

Sir Nigel Wilson, former boss of financial services giant Legal & General, wrote in October that stamp duty should be scrapped or reduced for “older people who want to downsize” in order to “free up housing for younger generations.” “.

He added that making it cheaper to downsize would also “free up cash” that could then be used to “support family members, such as grandchildren, and help the next generation move up the property ladder.”

Data released last week by the Office for National Statistics showed house prices fell 1.4 per cent last year as rising mortgage rates hit demand.