RSM UK has called on government to reassess planning reforms and tax policy after its latest research highlighted mounting viability challenges across the residential development sector.
In an open letter to Matthew Pennycook MP, minister of state for housing and planning, the audit, tax and consulting firm set out a series of proposals aimed at stimulating growth and accelerating delivery, including the potential reintroduction of multi-dwelling relief on stamp duty land tax, which was abolished in 2024.
The firm warned that a combination of planning delays, rising construction costs and elevated tax burdens is rendering many schemes unviable, putting pressure on the government’s housebuilding ambitions. It added that the Spring Statement failed to provide the level of fiscal or market intervention required to restore confidence.
Findings from RSM UK’s Real Estate 360 report, based on a survey of more than 270 industry leaders, underline the scale of the challenge. Nearly four in 10 respondents (39%) identified rising development costs as the primary barrier to meeting housing targets, while 26% pointed to planning constraints.
Confidence in delivery also appears to be weakening. More than half (58%) of respondents said they do not believe the government will meet its target of delivering 1.5 million homes by 2029, up from 54% a year earlier. Only 26% said the target remains achievable.
Stacy Eden, partner and national head of real estate at RSM UK, said: “Short-termism and a piecemeal approach to increasing housing supply is currently holding the industry back. That’s why we’ve called for greater urgency and for the government to reconsider policy and tax reform.
“We’re asking for government to work with the sector to continue to streamline the planning process, remove unnecessary red tape and reduce taxes on the industry, speeding up Gateway 2 approvals.
“Reconsidering abolished tax relief will also be a good start in stimulating the market, in desperate need of some injection to ensure developments become more viable.”
The survey also explored potential policy interventions to improve scheme viability. A third (33%) of respondents said abolishing stamp duty would have the greatest impact, while 28% highlighted the need for greater investment in skilled labour.
The same proportion said more support is required for first-time-buyers, and 24% pointed to the need for increased resourcing of planning departments.
Eden added: “While we recognise that some factors impacting housing supply are mainly outside government control, lengthy planning processes, high taxes, and a lack of skilled workers are all currently holding the sector back.
“A long-term, holistic approach to overhauling planning policy is urgently needed from government to enable the sector to thrive.”
Melanie Leech, chief executive of the British Property Federation, added: “RSM’s report echoes what BPF members have been saying for many months – despite the Government’s best intentions and some welcome planning reforms, development viability is severely challenged across the country.
“Recent announcements such as the next wave of New Towns will take some time to gear up – in the meantime the development industry needs government to take urgent measures on the cost of building to unlock homes and commercial space.
“One immediate action that would support new homes would be the reintroduction of a form of Multiple Dwelling Relief, which would be a shot in the arm for Build-to-Rent developments, in turn unlocking viability for lager housing sites.”
Industry figures continue to point to a widening gap between policy ambition and delivery realities, with viability pressures increasingly cited as a constraint on both residential and mixed-use development pipelines.
