Building bosses have urged Labour to rule out further tax hikes and cut red tape as the Government’s housing plans lie in tatters.
As Angela Rayner quit as Housing Secretary over her own property dealings, ministers faced more warnings that they will miss their target for 1.5m homes to be built in this parliament.
Nationwide and Virgin Money, meanwhile, raised mortgage rates – fuelling fears that a spike in government borrowing costs on global bond markets is feeding through to the housing market.
Hina Bhudia, a partner at mortgage and insurance advisers Knight Frank Finance, said: ‘Nationwide’s decision marks a turning point – because they are typically the cheapest on the High Street, and when they reprice, others tend to follow.’
Berkeley Group called on Chancellor Rachel Reeves to rule out further tax hikes on the housing industry in her upcoming Budget. The housebuilder also warned of ‘a confluence of well-documented regulatory, economic and market factors’ holding back development, adding: ‘The focus must be on de-regulation and not increasing taxation.’
An executive at a rival builder said the ‘more broad business environment is difficult’ as high taxes and inflation under Labour hit jobs, deter investment and sap growth.
Happier times: Rachel Reeves and Angela Rayner at a Berkeley project
A report this week showed the construction sector is suffering its longest downturn since the beginning of the Covid-19 pandemic with housebuilding falling well-short of the pace required to meet Rayner’s targets.
Official figures on Wednesday revealed just 38,780 homes were completed between January and March this year – a little over half the 75,000 required in every three-month period and the lowest number since 2016 outside the pandemic.
Gareth Belsham, director of Bloom Building Consultancy, which works on projects across the country, said: ‘Angela Rayner’s plan to get 1.5m new homes built by 2029 is likely to join Whitehall’s growing list of Quixotic housebuilding targets.’
Trade body the British Property Federation Rayner’s successor as housing secretary to address a host of issues holding back development.
Chief executive Melanie Leech said: ‘Now more than ever business and investor confidence in the UK matters if we are to grow the economy, create jobs, and deliver the modern infrastructure we need.
‘Such changes at the top of Government do little to reassure those looking to invest and looking to deliver, especially within our sector which relies on stability.
‘We hope the next secretary of state will continue Angela Rayner’s robust support for the builders not the blockers but will also take the opportunity to rethink policies which are damaging confidence.’
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