Labour should ban greenfield development for 10 years and launch a stamp duty holiday for downsizers to kick start the housing market in 2025, says a building society boss.
Family Building Society chief executive Mark Bogard says the government’s plan to build 1.5 million homes over the next five years will only play a small part in solving the UK’s housing crisis. Over the last five years, the country built around one million homes.
He argues that Deputy Prime Minister Angela Rayner’s planning proposals “will certainly not solve the housing crisis as the annual new build target [of 370,000 homes] only represents 1% of the existing housing stock”.
Bogard says: “She needs to concentrate on the other 99% and also focus more on brownfield development rather than greenfield which will be easier to get done and generate fewer objections.
“If I were her, I’d ban greenfield development for 10 years.”
Among the government’s new planning rules, local councils must adopt a brownfield first approach, but must “review their greenbelt boundaries to meet targets, identifying and prioritising lower quality ‘grey belt’ land”.
Bogard also says that granting homeowners who want to downsize a stamp duty holiday would do much to boost supply, particularly for growing families.
The mutual head says: “Giving downsizers a stamp duty holiday would also help get older people out of under-occupied family homes thus effectively increasing housing supply.”
However, if anything, the government looks set on tightening stamp duty levies.
It will push ahead with stamp duty changes at the start of April, which will see relief on the tax not extended for first-time buyers paying up to £425,000 for a home.
Bogard is also bearish on base rate cuts this year, only expecting two in 2025.
He says: “After the Bank of England held rates at 4.75% on 19 December the market is now expecting rates to go down only twice by 0.25% in 2025 to 4.25%.
“However, they could go lower, just look at what’s happening in the Eurozone where both France and Germany are hurting and rates are falling.”
Last month, Bank of England governor Andrew Bailey said he expected four 0.25% “gradual” cuts this year, moving the base rate from its current 4.75% mark.
