Rachel Reeves has been urged to use next month’s Autumn Budget to deliver decisive reforms to stabilise the housing market and unlock long-term growth, amid warnings that uncertainty over tax changes is paralysing activity.

In a letter to the Chancellor, Daniel Austin (main picture), chief executive and co-founder of real estate lender ASK Partners, said the sector faced a “fragile” outlook as developers, investors and homebuyers adopt a “wait and see” stance in response to speculation about sweeping property tax reforms.

Proposals under discussion include extending National Insurance to landlords’ rental income, replacing stamp duty with an annual property levy, and changes to capital gains tax.

WORSENING SUPPLY SHORTAGES

Austin warned that while each option could raise revenue, poorly designed reforms risked deterring investment and worsening supply shortages.

“Rumours are already shaping investor and homeowner behaviour,” he said. “Prolonged uncertainty over property taxes is suppressing activity. With the right policies, confidence could return – housing has often led the economy out of downturns.”

He urged the government to prioritise clarity on tax policy, planning reform and greater support for SME housebuilders, who now deliver only 15% of homes compared with 40% before 2008.

INVESTMENT AND INCENTIVES

Austin also called for investment in construction skills, incentives for brownfield regeneration and social housing delivery and measures to attract both domestic and overseas capital into UK real estate.

The intervention comes as Labour faces pressure to meet its pledge of building 300,000 homes a year – a target no government has achieved since it was first set in 2004.

Analysts estimate at least 385,000 new homes are needed annually to ease affordability pressures.

“The market is ready to deliver if given a clear, credible framework,” Austin said. “Decisive reforms and targeted stimulus are urgently needed to restore confidence, unlock supply, and drive growth.”