Housebuilding Berkeley Homes has said the Chancellor should have been bolder on his overhaul of stamp duty and warned his reforms may not be enough to tackle London’s housing shortage.
The centrepiece of George Osborne’s Autumn Statement this week was the removal of the hated “slab” structure of the tax, which saw stamp duty bills treble on homes above £250,000.
The duty will now be levied incrementally like income tax, with homebuyers at the top end of the market paying out much more.
Berkeley managing director Rob Perrins said: “The real worry I have is that we don’t build more houses at the end of it. That’s always been my concern and the unintended consequences of change.
“We make investment decisions for 15 or 20 years and we don’t know what environment we are going to be working in. Stamp duty had to be fairer at the bottom end, so I absolutely support that. But I don’t think the Government went far enough — I wish they’d dropped it further.
“Stamp duty stops the mobility of labour. When it was 0.5 per cent, people could move around a lot more and you’d get more transactions. I don’t think they were brave enough.”
Despite the blow to the Treasury coffers, Perrins said he would have scrapped stamp duty completely below £250,000.
Asked whether the moves would encourage housebuilding in the capital, he warned: “I don’t think it will. The work we’ve done internally on the mansion tax (suggests) housebuilding in London could drop by a third.
“I genuinely worry about the changes. The uncertainty means you’ll get less homes built, especially in London — and especially if you’re going to get a mansion tax if Labour win. If people believe that taxation will rise, sentiment is negative and confidence will go from the market.”
He added that housebuilding at the lower end of the market would only pick up if transaction levels increased, and “I don’t know if they’ve lowered it enough to increase transactions”.
Around 15 per cent of Berkeley’s revenues come from sales of homes worth more than £2 million, where purchasers now face an extra £53,750 in costs. “Sales rates will slow down,” he added.
Berkeley’s pre-tax profits jumped 80 per cent to £304.9 million in the six months to October 31. The firm remains on track to return £1.7 billion to shareholders by 2021.Reuse content