Stamp duty is choking the market as buyers delay moves until after the Budget, warns housebuilder

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By JANE DENTON, MONEY REPORTER

Updated: 09:54 BST, 11 September 2026

A leading housebuilder has warned of a further deterioration in the housing market and urged the Government to reform stamp duty, which has become a 'binding constraint'. 

Berkeley Group said war in the Middle East and ongoing political uncertainty have hit consumer sentiment, with policy decisions dragging further on activity and buyers delaying transactions until after the Budget. 

The London-focused housebuilder renewed calls for 'urgent' stamp duty reform, warning that 'far more tax revenue is being lost through depressed activity than is being gained'.  

Berkeley wants stamp duty for first-time buyers and downsizers to be capped at one per cent. The additional surcharge applies to buyers who already own one or more residential properties and are purchasing an additional property. 

Stamp duty was introduced when interest rates were 0.25 per cent but now requires 'urgent reform' to stimulate the market. 

'What was a manageable frictional cost when interest rates were at those unique and unsustainable levels, has become a binding constraint, now that interest rates have returned to more normal levels,' Berkeley said.  

The Office for Budget Responsibility has historically estimated that for every one per cent cut in stamp duty, transactions may increase by up to six per cent. 

Upcoming: Chancellor John Healey will unveil his Budget on October 28 

The housebuilder said its proposed measures would help first-time buyers, encourage older owners to downsize and support investment in homes for rent.

Higher transaction levels would in turn improve the viability of new schemes and support delivery of affordable housing alongside private homes.  

Berkeley joins the chorus of housebuilders calling for lower stamp duty and government support for first-time buyers to ease affordability constraints. 

It said that amid war in the Middle East and 'ongoing political change and uncertainty' in Britain, 'sentiment and core economic indicators have been further impacted, with a consequential effect on trading and general housing market activity'.

It said: 'While Berkeley is receiving good and stable levels of enquiries, the uncertainty and volatility in the market means that customers without an immediate need to move and readily available liquidity remain more cautious to commit, a position similar to that reported with our full year results in June.'

The housebuilder said it was 'mindful' that some buyers may defer property transactions until after October's Budget and 'any election uncertainty dissipates'. 

Some British housebuilders, ⁠including Berkeley, have curbed land buying and slowed construction as affordability concerns, political turmoil and energy-driven cost inflation take hold.   

Berkeley, which builds homes across ​London and southern England, ​said it was ⁠fielding good and stable levels of enquiries, but that customers without an urgent need to move and ready cash ​remained reluctant to commit.

The group said it was pressing ahead ​with its goal ⁠to make £1.4billion in pre-tax profit over the next four years, with profits expected to be slightly weighted towards the first half of the current financial ⁠year.

The group's shares slipped 0.12 per cent or 4.00p to 3,290.00p on Friday, having fallen nearly 10 per cent in the past year. 

Richard Hunter, head of markets at Interactive Investor, said: 'The shares have inevitably been impacted by the dour sentiment around the sector, having fallen by 9 per cent over the last year as compared to a gain of 10 per cent for the wider FTSE 250, to which it was relegated in June. 

'The price is also 44 per cent below the pre-pandemic highs of January 2020, overriding the group’s strategic nous and unwavering focus on a longer-term strategy. 

'Indeed, overall there is little new news within the update, such that the market consensus of the shares as a hold will likely remain in place until such time as there are some signs of the green shoots of recovery.' 

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