Trade group says changes needed to reverse drop-off in new homes being built

The British Property Federation has said tax changes are needed in next month’s Budget to reverse the drop-off in new homes being built.

The trade group said reform was required to address a “fundamental and debilitating viability challenge facing development that is jeopardising the delivery of new homes”.

It added: “The crisis is particularly acute in the BtR sector, which is vital to overall housing delivery, with construction starts in the first half of 2025 falling to just 2,600 homes, compared with 18,000 new BtR homes delivered in the whole of 2024.

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Rachel Reeves is being asked to look at tax changes to help kickstart BtR schemes

“The BPF’s submission highlights where the tax system is undermining the viability of high-density housing developments that are rolled out at pace.”

It said that measures the chancellor should consider were reinstating Stamp Duty Land Tax support for high density housing, extending Empty Property Business Rates Relief to 12 months and removing council tax on newly developed BtR homes.

BPF chief executive Melanie Leech said: “We appreciate the fiscal pressure the Government is under, but we urge the Chancellor not to underestimate the cost of inaction – the Government will not raise any taxes and levies on development that doesn’t happen.

“Only by addressing the development viability crisis will the Government unlock the economic growth and investment we need to see across the country.”