Daniel Austin is chief and co-founder at ASK Companions
Expensive Chancellor Reeves,
As you put together your Autumn Finances, we urge you to ship measures that stabilise the property market now whereas laying foundations for long-term development.
The housing market has stagnated this 12 months, with builders, buyers, and customers adopting a “wait and see” strategy. That is fuelled not solely by piecemeal coverage alerts but in addition by hypothesis round main property tax reforms, from extending Nationwide Insurance coverage to landlords’ rental earnings, to changing stamp obligation with an annual property levy, to altering capital features tax on higher-value properties.
Every carries fiscal potential but in addition critical dangers. Extending NI might elevate £3bn yearly however drive small landlords from the market, worsening provide. Eradicating CGT exemptions for major residences could be profitable however politically divisive. Abolishing stamp obligation would ease mobility however create an £11bn income hole, whereas an annual levy dangers cashflow strains on households with out assured returns. Even mooted council tax reforms might exacerbate regional inequality.
Uncertainty alone is paralysing exercise. Rumours are already shaping investor and home-owner behaviour. But with the suitable insurance policies, confidence might return. Historical past exhibits housing typically leads the financial system out of downturns. Current modest rises in home costs and mortgage approvals trace at restoration, however systemic reform is crucial.
The scarcity of properties to lease and purchase is the basis of affordability pressures, with profound results on GDP and social stability. Your 300,000 properties goal is welcome however has by no means been met since its inception in 2004. Capital Economics estimates at the least 385,000 are wanted yearly. Since 1970, France has constructed practically twice as many properties because the UK regardless of related inhabitants development. This imbalance calls for radical however credible reform, not short-term fixes.
We urge you to prioritise the next in October:
- Present readability on tax reform
Rumours of sweeping tax adjustments are undermining confidence. If reforms are pursued, they have to be phased, predictable, and paired with supply-side incentives, not solely designed for income.
- Empower SME housebuilders
SMEs constructed 40% of properties pre-2008; at the moment simply 15%. Smaller developments are extra regionally accepted. Insurance policies might embody allocating small land plots for SMEs, totally permissive planning on brownfield websites beneath 2.5 hectares, and fairness help to strengthen SME stability sheets.
Delays stay the most important barrier to supply, inflating prices and deterring funding. Unbiased decision-making to take away political conflicts, mixed with non-public sector help to clear backlogs, would unlock development. Planning reform isn’t just regulatory, it’s an financial necessity.
- Strengthen development abilities
Submit-Brexit labour shortages are acute. Higher help for off-site development would enhance productiveness, entice youthful and extra numerous employees, and lower construct instances.
- Prioritise social housing
The online lack of 200,000 social properties up to now decade has deepened the disaster. Councils want actual powers and incentives to ship at scale. Reforming obligatory buy guidelines, permitting acquisitions with out “hope worth” prices, would assist unblock stalled tasks.
- Incentivise brownfield and conversions
Computerized planning consent for ESG-compliant brownfield websites would speed up regeneration, maximise infrastructure, and lower environmental impression.
- Appeal to funding, home and worldwide
Traders stay prepared, however many really feel let down by the shortage of incentives. Analysis from ASK exhibits 91% of personal buyers will keep actual property allocations, with robust curiosity in information centres, logistics, and later-life housing. Actual property debt can be seen as enticing, providing decrease volatility and common earnings. Clear, investor-friendly insurance policies might channel this capital into growth and infrastructure.
Chancellor, the market is fragile. Extended uncertainty over property taxes is already suppressing exercise. Decisive reforms and focused stimulus are urgently wanted to revive confidence, unlock provide, and drive development. The sector is able to ship if given a transparent, credible framework. We hope to see these priorities mirrored in your Finances so housing can as soon as once more lead the UK financial system out of uncertainty.
