First-time buyers are being locked out of the housing ladder
The volume of new build housing schemes entering the market has plummeted to its lowest point in nearly a decade, new figures have shown.
Developers are launching fewer fresh projects than at any time since January 2017, according to research by property sales portal Rightmove. The decline contradicts the Government’s flagship commitment to construct 1.5million homes during this Parliament. While the total number of properties for sale – both new and second-hand – has surged by 85% over four years, campaigners caution this is concealing a severe shortage of genuinely affordable properties in desirable locations.
Rightmove is now calling for immediate action from the Chancellor in the Autumn Budget, warning ministers they will fall short of their own housebuilding targets without swift intervention.
Rightmove’s proposed solution
- Abolish stamp duty completely for first-time buyers on both new build and resale properties.
- Inject additional funding into affordable housing to relieve pressure on struggling developers.
- Implement carefully targeted measures to assist first-time buyers in getting onto the property ladder.
The intervention arrives at a politically sensitive time, with Andy Burnham poised to assume the role of Prime Minister.
Mr Burnham has consistently been open about his ambitious plans for reforming the property tax system. He is believed to be considering a proposal to abolish both stamp duty and council tax entirely in favour of a single annual property levy, an idea promoted by the campaign group Fairer Share.
Under the proposed plan, homeowners would face an annual levy of approximately 0.48% of their property’s value – meaning a £300,000 home would incur a bill of roughly £1,440 per year, with higher rates suggested for second homes and properties held by foreign buyers.
Critics worry the overhaul would create a postcode lottery, with homeowners in the North paying considerably less than under the existing system, while those in London and the South East could face substantially larger bills. Mr Burnham has previously advocated for a land value tax, contending it would penalise those “sitting on” land and hoarding it, with the revenue redistributed.
A coalition of prominent economists, including a former Goldman Sachs chief economist who advises Mr Burnham, has also written to him calling for stamp duty and council tax to be abolished in favour of a flat 1% annual property value tax, eliminating what they describe as the “absurdity” of modest terraced homes paying proportionally more tax than mansions.
The suggestion has already attracted criticism from the Tories, with shadow housing secretary Sir James Cleverly labelling it a “garden tax” straight out of the “Corbyn playbook”.
No official blueprint has yet been released and Government insiders emphasise the proposals remain under consideration rather than confirmed policy. Tax relief schemes for first-time buyers have previously faced criticism, with opponents arguing they simply allow housebuilders to pocket the benefits by inflating prices and boosting profits.
Developers push for action
Steve Mariner, Group Sales & Marketing Director at housebuilding giant Barratt Redrow, acknowledged that ministers had made encouraging strides in freeing up land for development, but cautioned that red tape was strangling supply.
“Increasing regulatory costs are holding new homes back, while low customer confidence, higher borrowing costs and wider economic uncertainty are all making it harder for first-time buyers to get onto the housing ladder,” he said.
He urged a joint initiative between developers and the Treasury to support buyers, stating: “For the first time in decades there is no government support to help people in England buy their first home, right when it’s needed most.”
Alex Slater, Rightmove’s Director of New Homes, warned that first-time buyers formed the bedrock of the entire market yet were increasingly being shut out.
Colleen Babcock, the portal’s property expert, stressed that Britain still lacked sufficient affordable homes in the right locations “to support people at every stage of the moving journey, from first-time buyers to downsizers.”
