Berkeley Group Calls for UK Property Tax Cuts as Buyers Remain Cautious
Calls for Property Tax Reform Amidst Subdued Housing Demand
Sept 11 (Reuters) – British homebuilder Berkeley Group urged the government on Friday to cut property taxes as cautious buyers keep housing demand subdued in the run-up to October’s budget.
Proposed Changes to Stamp Duty
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.
Benefits for First-Time Buyers and the Housing Market
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.
Industry-Wide Support for Lower Stamp Duty
Rivals including Bellway and Barratt Redrow have also called for lower stamp duty and government support for first-time buyers to ease affordability constraints.
Government Response
New Prime Minister Andy Burnham has, however, denied plans to reduce or scrap stamp duty in next month’s budget.
Market Conditions and Buyer Sentiment
Challenges Facing Housebuilders
BUYERS HOLD BACK
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.
Current Performance and Outlook
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 ($1.9 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.
Impact of Political and Global Events
Berkeley said the prolonged Middle East conflict and political change in Britain had dampened sentiment further, weighing on trading and housing market activity.
Additional Information
($1 = £0.7398)
(Reporting by Simone Lobo and Raechel Thankam Job in Bengaluru; Editing by Janane Venkatraman and Mark Potter)
