Daniel Austin is chief and co-founder at ASK Companions
Pricey Chancellor Reeves,
As you put together your Autumn Funds, we urge you to ship measures that stabilise the property market now whereas laying foundations for long-term progress.
The housing market has stagnated this yr, with builders, traders, and customers adopting a “wait and see” method. That is fuelled not solely by piecemeal coverage indicators but additionally 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 beneficial properties tax on higher-value houses.
Every carries fiscal potential but additionally severe dangers. Extending NI may elevate £3bn yearly however drive small landlords from the market, worsening provide. Eradicating CGT exemptions for main residences can 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 may exacerbate regional inequality.
Uncertainty alone is paralysing exercise. Rumours are already shaping investor and house owner behaviour. But with the suitable insurance policies, confidence may return. Historical past reveals housing usually leads the financial system out of downturns. Latest modest rises in home costs and mortgage approvals trace at restoration, however systemic reform is important.
The scarcity of houses to hire and purchase is the foundation of affordability pressures, with profound results on GDP and social stability. Your 300,000 houses goal is welcome however has by no means been met since its inception in 2004. Capital Economics estimates a minimum of 385,000 are wanted yearly. Since 1970, France has constructed almost twice as many houses because the UK regardless of related inhabitants progress. 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 houses pre-2008; as we speak simply 15%. Smaller developments are extra regionally accepted. Insurance policies may embody allocating small land plots for SMEs, totally permissive planning on brownfield websites below 2.5 hectares, and fairness assist to strengthen SME stability sheets.
Delays stay the largest barrier to supply, inflating prices and deterring funding. Impartial decision-making to take away political conflicts, mixed with personal sector assist to clear backlogs, would unlock progress. Planning reform is not only regulatory, it’s an financial necessity.
- Strengthen development abilities
Publish-Brexit labour shortages are acute. Higher assist for off-site development would enhance productiveness, appeal to youthful and extra various employees, and reduce construct instances.
- Prioritise social housing
The online lack of 200,000 social houses 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 initiatives.
- Incentivise brownfield and conversions
Automated planning consent for ESG-compliant brownfield websites would speed up regeneration, maximise infrastructure, and reduce environmental influence.
- Entice funding, home and worldwide
Buyers stay prepared, however many really feel let down by the shortage of incentives. Analysis from ASK reveals 91% of personal traders will preserve actual property allocations, with robust curiosity in knowledge 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 may 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 progress. The sector is able to ship if given a transparent, credible framework. We hope to see these priorities mirrored in your Funds so housing can as soon as once more lead the UK financial system out of uncertainty.
