Andy Burnham urged to scrap unpopular tax 'in urgent reform' as property crisis continues

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The Prime Minister is being told to axe stamp duty as part of the Labour Government's housebuilding efforts

Andy Burnham is being urged to scrap an unpopular tax to meet bold targets set by the Labour Government.

Berkeley Group has pressed ministers to introduce sweeping changes to stamp duty, arguing that the current system is holding back efforts to deliver 300,000 new homes annually.

The Ftse 250 housebuilder is seeking a one per cent cap on stamp duty for both first-time buyers and homeowners looking to downsize, alongside the scrapping of the existing five per cent surcharge levied on property investors.

In its latest intervention, the company described the need for reform as "urgent" if the Government's housebuilding ambitions are to be realised.

According to polling by the Adam Smith Institute, around 73 per cent of Brits believe stamp duty should be significantly reduced or completely abolished.

A YouGov survey similarly demonstrated that roughly 63 per cent. of GB adults support abolishing stamp duty on main home purchases.

Stamp duty is levied on homebuyers when they purchase property valued above a certain threshold.

Berkeley stated: "Collectively, this supports people buying their first home, frees up more family homes, and provides more homes for rent."

The housebuilder pointed to several headwinds dampening buyer confidence in recent months, including the prolonged Middle East conflict and ongoing political upheaval in the UK.

Despite these pressures, Berkeley reported that inquiry levels remained "good and stable". However, the firm acknowledged that housing market volatility was making potential purchasers who lacked an urgent reason to relocate "more cautious to commit".

Berkeley also flagged the prospect of buyers holding off on transactions until after the autumn Budget in October, noting it remained "mindful" of this risk as it plans for the months ahead.

At the heart of Berkeley's argument is the contention that stamp duty rules were designed for an era of historically low borrowing costs and are no longer fit for purpose.

The company told shareholders: "To meet the Government's target of 300,000 new homes per annum, and help address the cost of living crisis by making homes more affordable, the current stamp duty regime, that was introduced at a time when interest rates were 0.25 per cent, requires urgent reform."

Berkeley argued that what had once been a tolerable transaction cost during a period of ultra-low rates had now become a "binding constraint" as borrowing costs returned to more typical levels.

The housebuilder confirmed it would press ahead with its £1.4billion pre-tax profit plan, though it anticipated earnings would be skewed towards the first half of its current financial year given the uncertain market backdrop.

Berkeley said it was "encouraged" by the Government's acknowledgement of housebuilding's significance, particularly its stated goal of delivering 1.5 million homes by 2029.