The chairman of Berkeley Homes is warning that George Osborne’s latest three per cent stamp duty hike for buy to let properties and second homes risks damaging the ability of housebuilders to construct new homes.
Tony Pidgley says: “We welcome the political support for the housebuilding sector in the Chancellor's Autumn Statement but are concerned that the continued changes to property taxation may well result in unintended consequences on the market and not lead to the level of housebuilding required to meet the underlying demand.”
Many new-build projects rely heavily for funding for later phases of projects on early sales, often off-plan, to investors - precisely those who will be faced with the Osborne surcharge.
Pidgley also wants the government to take action on red tape which, he says, still hampers development despite efforts over recent years to speed up planning.
“Delivering more homes of all tenures requires bold action with up to date Local Plans in place in every borough and a mechanism to bring large scale, complex sites into production more quickly. While the will is there, the process is slow and expensive and in this period of cuts, the role of the public sector needs to evolve so that it can become less risk averse and actively enable development” says Pidgley.
His comments came as he presented Berkeley Group’s latest figures to the City.
The company - which majors on high-end schemes in London and the south east, announced that its pretax profit fell to £293.3m in the six months to the end of October, down from £304.9m a year before. But removing a one-off boost from a ground rent assets sale last year, Berkeley's pretax profits actually grew 10.2 per cent to £242.3m.
Its landbank grew by 800 plots to 38,233 over the six months under review.