Berkeley Advocates for Stamp Duty Reform Ahead of Budget
Berkeley Group has called for urgent reform of stamp duty land tax to stimulate the housing market and support the government's ambitious homebuilding targets.
Urgent Reform Needed
The Berkeley Group, a prominent FTSE 250 housebuilder, has made a strong case for the urgent reform of stamp duty land tax (SDLT) as the UK prepares for its upcoming Budget announcement. The company argues that the current SDLT framework is a significant barrier to achieving the government's ambitious target of constructing 300,000 new homes annually.
Proposed Changes
Berkeley has proposed a cap on stamp duty at 1% for first-time buyers and downsizers. Additionally, the firm is advocating for the removal of the 5% surcharge that applies to investors purchasing additional dwellings. These changes are seen as essential to stimulate market activity and improve housing accessibility.
Economic Context
The call for reform comes as Berkeley aims for a pre-tax profit of £1.4 billion over the next four years. However, market conditions have been challenging, exacerbated by ongoing political changes and the prolonged conflict in the Middle East, which has contributed to economic uncertainty. As a result, Berkeley has reduced its production plans by approximately 25% to focus on cash generation.
Market Impact
The Office for Budget Responsibility has indicated that a 1% reduction in stamp duty could lead to a 6% increase in housing transactions. Berkeley's leadership believes that the current SDLT regime, established when interest rates were significantly lower, is now a constraint on the housing market. They argue that more tax revenue is lost through decreased activity than is gained from SDLT on new builds, according to assessments from HMRC.
Industry Support
Berkeley's call for reform has garnered support from other industry players, including Bellway, Yorkshire Building Society, Rathbones, and Family Building Society, all of whom recognise the need for changes to the SDLT framework to reinvigorate the housing market.
Looking Ahead
As the Autumn Budget approaches at the end of October, many prospective buyers are expected to delay their transactions until after the announcement. Berkeley has noted that market sentiment and core economic indicators have worsened since May 2026, further complicating the landscape for potential homebuyers.
In summary, the Berkeley Group is advocating for significant changes to stamp duty regulations as part of a broader strategy to support the UK housing market and meet government targets for new home construction. With the Budget on the horizon, the industry is watching closely to see if these calls for reform will be addressed.