UK homebuilder Berkeley Group has today urged the government to cut property taxes as cautious buyers keep housing demand subdued in the run-up to October’s budget.
The London-focused company called for reforms to stamp duty, a property purchase tax, including a 1% cap for first-time buyers and downsizers, and the removal of a 5% surcharge on investors.
Berkeley said the proposed cap would help first-time buyers get on the property ladder, free up more family homes and increase the supply of rental properties.
Rivals including Bellway and Barratt Redrow have also called for lower stamp duty and government support for first-time buyers to ease affordability constraints.
New British Prime Minister Andy Burnham has, however, denied plans to reduce or scrap stamp duty in next month’s budget.
Facing what analysts have called one of the most challenging markets in recent history, British housebuilders including Berkeley have curbed land buying and slowed construction as affordability concerns, political turmoil and energy-driven cost inflation take hold.
The strains have pushed Britain’s construction sector, and residential building in particular, into a rapid contraction.
Berkeley, which builds homes across London and southern England, said it was fielding good and stable levels of enquiries, but that customers without an urgent need to move and ready cash remained reluctant to commit.
The company said it was pressing ahead with its goal to make £1.4 billion in pre-tax profit over the next four years, with profits expected to be slightly weighted towards the first half of the current financial year.
Berkeley said the prolonged Middle East conflict and political change in Britain had dampened sentiment further, weighing on trading and housing market activity.
