Aldermore has urged the government to introduce an 18-month stamp duty holiday for new homes under £500,000 and to revive Help to Build, arguing that both measures would support first-time buyers and smaller developers.
Ahead of this week’s sutumn Budget, the bank said the housing market required a more imaginative approach from ministers if they are to stimulate sales and give SME housebuilders the confidence to increase output.
Its call follows findings from Aldermore’s First Time Buyer Index, based on a survey of 2,000 prospective purchasers, which shows strong demand for renewed policy intervention.
SUPPORT FOR BUYERS AND BUILDERS
The lender said an 18-month stamp duty holiday for buyers of new homes priced below £500,000 would help maintain cashflow for smaller developers and ease the path for those trying to get on the housing ladder.
It also wants the government to reinstate Help to Build, with a 20% government-backed equity contribution for new homes where buyers provide a 5% deposit.
Survey responses suggest clear appetite for help. More than two thirds of first-time buyers surveyed said the government and mortgage industry must be more creative with incentives, and a similar proportion supported the return of Help to Buy.
More than a third wanted greater support for affordable housing delivery, while around a quarter called for stamp duty changes.
CALL FOR CERTAINTY
Danielle Soto, managing director for savings and business finance at Aldermore, said: “This week’s Budget is a critical juncture for the Chancellor to help unlock growth.
“Delivering more homes depends on simplifying the planning system and increasing infrastructure investment, but the house building sector – particularly SME developers – also needs certainty and targeted support to scale up delivery.”
She said: “While the government has striven to reach its target of building 300,000 homes a year, the data on completed homes to date demonstrates this ambition is currently out of reach. Therefore, we must search for more creative and far-reaching solutions.
“The housebuilding sector, and SME developers who find themselves disproportionately impacted by red tape and complexity in particular, requires more certainty in order to achieve this.”
Soto added: “First time buyers are equally in need of greater support – more than two-thirds say the Government and mortgage industry must be more creative with incentives and nearly seven in 10 support reintroducing the Help to Buy scheme. Nearly a quarter want Stamp Duty relief or higher thresholds.
“That’s why we’re calling for an 18-month Stamp Duty holiday for buyers of new homes under £500,000 – to stimulate sales, support first-time buyers and help smaller developers maintain cash flow.”
She continued: “We’re also calling on the government to reinstate Help to Build with a government-backed equity contribution of 20% when buyers contribute 5%. This would enable smaller builders to re-enter the market and accelerate delivery of new homes, especially in regional areas where major housebuilders are less active.
“While there is no single solution, these measures would provide meaningful help to both SME housebuilders and first-time buyers.”
The bank said the combination of renewed demand-side support and measures to improve delivery would give the market a much-needed lift at a time when annual housing completions remain well short of national targets.
