Mortgage industry figures are urging the government to review stamp duty for first-time buyers after Rightmove revealed the number of new-build housing developments coming to market had fallen to its lowest level since January 2017.

The property portal said that although the number of homes available for sale across both new-build and existing properties is up 85% compared with four years ago, there are still not enough affordable homes in the right locations.

It is calling on the government to remove stamp duty for first-time buyers on both new-build and resale properties in the Autumn Budget.

It would also like to see greater investment in affordable housing and support measures to help more first-time buyers onto the property ladder.

Adam Bovingdon, managing director – real estate finance at United Trust Bank, also backed calls for stamp duty reform.

He said: “The latest figures should concern anyone serious about increasing housing delivery, or perhaps more importantly, anyone about to take over as Prime Minister.

“The government has rightly made boosting housing supply a key priority, but setting ambitious targets is one thing; homes will only be built if developers have the confidence to invest.

“At present there is a clear disconnect. While planning reform and faster decision-making are welcome, the economy has slowed, consumer confidence remains fragile and affordability pressures continue to weigh on prospective buyers.

“Developers cannot be expected to commit millions of pounds to new projects if there is uncertainty over who will ultimately buy the homes they build.

“The debate now needs to extend beyond planning and focus equally on stimulating demand.

“Measures such as Stamp Duty reform, improved mortgage accessibility and targeted support for first-time buyers all deserve serious consideration if the government is to achieve its housing ambitions.”

DEVELOPERS NEED CONFIDENCE

He also warned there is a risk that too much attention is being focused on the largest housebuilders.

He said: “SME developers have long played a vital role in delivering new homes, but many are now facing the combined pressures of higher construction costs, increased regulation, elevated funding costs and weaker sales rates.

“Bringing forward viable schemes has become significantly more challenging.

“If the government wants to deliver a meaningful increase in housing supply during this Parliament, it must restore confidence at both ends of the market.

“Developers need confidence to build and buyers need confidence to buy. Without both, housing targets risk remaining aspirations rather than outcomes.”

MARKET STIMULUS

New-build mortgage specialist The Mortgage Brain also backed Rightmove’s proposals, saying permanent stamp duty exemptions, particularly for first-time buyers, would help stimulate the market.

Enzo Mora, chief executive officer and founder of The Mortgage Brain, said: “The UK needs a game changing uptick in the number of new homes being built.

“Due to the war in Iran, we know inflation is going to jump and push build costs up further.

“This makes it hard for developers to estimate future build costs which will have had an impact on the level of new build homes being made available.

“The changes suggested by Rightmove will help drive some much needed demand and give developers the assurance needed to increase their productivity.”

TRANSACTION BOOST

Earlier this week, Gareth Lewis, deputy chief executive officer of specialist lender MT Finance, also called for stamp duty changes following the latest Lloyds House Price Index, which showed house prices increased by 0.2% in June compared with May.

He said: “After a strong start to the market this year, we are now seeing the ramifications of an interest rate environment which has become unstable again, and the impact this is having on transactions.

“Volatile funding rates are the real issue at the moment; while everything pointed towards a lower interest rate environment at the start of this year, the impact of war in the Middle East has since changed this outlook.

“REMOVING STAMP DUTY WOULD GIVE A SIGNIFICANT BOOST TO THE NUMBER OF HOUSING MARKET TRANSACTIONS”

“The housing market urgently needs some government stimulus to encourage activity.

“Removing stamp duty would give a significant boost to the number of housing market transactions – after the deposit, Stamp Duty is the biggest outlay when buying a home.

“It isn’t just a big hit for those at the lower end of the market but impacts buyers at every level.

“If you are moving up the ladder and looking at what you can afford to buy, the whacking great stamp duty cost is inevitably going to limit how far you can stretch yourself.”