Ahead of this afternoon’s Budget, specialist lender Aldermore is calling for an 18-month Stamp Duty holiday for buyers of new homes under £500,000 to stimulate sales and investment.

It also wants the government to reinstate Help to Build with a government-backed equity contribution of 20% for new builds when buyers contribute 5%.

Aldermore’s First Time Buyer Index ^– a survey of 2,000 prospective first time buyers – shows strong demand for policy support with more than two-thirds (68%) saying the government and mortgage industry must be more creative with incentives.

Nearly seven in 10 (69%) support reintroducing Help to Buy and more than a third (35%) want increased support for affordable housing supply. Meanwhile about a quarter (24%) want Stamp Duty relief or higher thresholds. 

Danielle Soto, Managing Director for Savings and Business Finance at Aldermore said: “This week’s Budget is a critical juncture for the Chancellor to help unlock growth. Delivering more homes depends on simplifying the planning system and increasing infrastructure investment, but the house building sector – particularly SME developers – also needs certainty and targeted support to scale up delivery.

“While the Government has striven to reach its target of building 300,000 homes a year, the data on completed homes to date demonstrates this ambition is currently out of reach. Therefore, we must search for more creative and far-reaching solutions. The housebuilding sector, and SME developers who find themselves disproportionately impacted by red tape and complexity in particular, requires more certainty in order to achieve this.

“First time buyers are equally in need of greater support – more than two-thirds (68%) say the Government and mortgage industry must be more creative with incentives and nearly seven in 10 (69%) support reintroducing the Help to Buy scheme. Nearly a quarter (24%) want Stamp Duty relief or higher thresholds. That’s why we’re calling for an 18-month Stamp Duty holiday for buyers of new homes under £500,000 – to stimulate sales, support first-time buyers and help smaller developers maintain cash flow.

“We’re also calling on the Government to reinstate Help to Build with a Government-backed equity contribution of 20% when buyers contribute 5%. This would enable smaller builders to re-enter the market and accelerate delivery of new homes, especially in regional areas where major housebuilders are less active. While there is no single solution, these measures would provide meaningful help to both SME housebuilders and first-time buyers.”

Meanwhile Tony Hall, Head of Business Development at Saffron for Intermediaries, says there is a clear need for policies that support stability and confidence across the housing market. He believes there are three key areas where action would make a meaningful difference.

1. Provide certainty on property tax reform

“There is growing speculation around changes to stamp duty, council tax and capital gains tax. Even the possibility of reform can cause buyers and sellers to delay decisions. We urge the Chancellor to set out a clear and long-term plan so that households and investors can move forward with confidence. Stability is essential if we want to avoid a slowdown in transactions.”

2. Support market mobility and protect the private rented sector

 “Although a mansion tax would apply only to high-value homes, it could still discourage some owners from moving, which could slow wider market activity. Movement at all levels is important to keep transactions flowing. At the same time, extra tax pressure on landlords could reduce rental supply when demand is already high. The Chancellor needs to strike a balance that supports both mobility and stability.”

3. Strengthen housing delivery through workforce and planning improvements

“House builders continue to face labour shortages along with high material and developer costs. This is made more challenging by planning system inefficiencies that slow the delivery of new homes.  Investment in vocational training and incentives for young people to pursue construction careers would help rebuild capacity, while a more consistent planning framework would reduce delays and support the government’s ambitions for increased housing supply.”