Berkeley Group urges Chancellor John Healey to slash stamp duty on new homes

London-listed housebuilder Berkeley Group has urged Chancellor John Healey to slash stamp duty on newly built homes, telling the Treasury that the move would unlock a £4.2bn windfall for the Exchequer. In its Budget submission, the developer warned that urgent intervention is required to stop the UK housing market from sliding over an economic cliff edge.

Berkeley Group Urges Stamp Duty Cuts to Unlock £4.2bn Exchequer Windfall

Berkeley told the Treasury that cutting the five per cent investor surcharge on new homes would unlock 30 per cent sales growth. The company argued that the current levy is stifling investor appetite for new rental developments.

Housebuilders have ramped up pressure on the government in recent months to boost housing demand. Sector leaders warn that soaring mortgage rates caused by the Iran war have battered market confidence.

Alongside the investor surcharge reduction, Berkeley asked the government to cap stamp duty at one per cent for first-time buyers and downsizers. Sector rivals Bellway and Barratt Redrow, alongside property portal Rightmove, have previously called for similar action on stamp duty.

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.

Rob Perrins, Berkeley Group

Housebuilders Confront Sharp Sales Slowdown and Rising Construction Costs

Berkeley urged the Chancellor to address a significant slowdown in the rate of new housing sales. Annual sales have dropped by 56 per cent since 2022, falling to 8,840 last year.

Property experts note that demand-side challenges continue to mount as building costs soar following the onset of the Iran war. Industry executives maintain that the government’s target of delivering 1.5 million homes this parliamentary term requires immediate policy levers that fit within a tight fiscal envelope.

Government Unveils New First-Time Buyer Equity Loans Ahead of the Budget

Shares in leading housebuilders surged following the announcement of the Your First Home scheme. Analysts characterized the new programme as a major catalyst for the sector.

However, Berkeley cautioned the Treasury that the Your First Home initiative will not be enough to solve the acute housing crisis, particularly in London. Perrins stated that the new equity loan scheme must be paired with stamp duty reductions to effectively restart homebuilding in urban areas.