Ahead of the upcoming Budget, UK Finance has released its latest report, Homes We Need, urging the government to introduce a permanent stamp duty cut, reform the planning system, and align housing allowances with rising rents. The organisation, which represents over 300 firms, including 120 mortgage lenders, highlights the need for immediate and long-term measures to address the UK’s 4.3 million housing shortfall.
Simplifying the planning process to boost housebuilding
UK Finance emphasises that the UK’s banking and finance sector is crucial in financing the housing market and supporting homebuyers. However, they argue that cooperation between the public and private sectors is essential to make meaningful progress. The report stresses that an overhaul of the planning system is needed to simplify processes and provide more certainty to developers.
Charles Roe, director of mortgages at UK Finance, explained, “Our new report sets out a range of recommendations to complement the government’s plans…making the planning process simpler, removing some of the barriers first-time buyers face, and ensuring we’re meeting the housing needs of our ageing population.”
UK Finance proposes shorter development timelines and more consistent planning decisions to give housebuilders the confidence to deliver on government targets for new homes. They believe that a more rules-based planning system would reduce uncertainty and accelerate progress towards resolving the housing crisis.
Permanent stamp duty cuts and support for homebuyers
To make homeownership more accessible, UK Finance is calling for the temporary nil-rate stamp duty band on properties up to £425,000 to be made permanent. This move would provide long-term relief to first-time buyers. Additionally, the report suggests increased access to shared ownership schemes and a review of post-financial crisis mortgage lending rules, which some believe have made it too difficult for potential borrowers to secure a mortgage.
The report also highlights the need to support older homeowners, or “last-time buyers,” by offering independent advice services to help them downsize. UK Finance suggests that stamp duty exemptions for older people looking to downsize could reduce upfront costs, making the transition smoother. Roe emphasised the importance of including homes for older buyers in the government’s housing target, saying, “We must ensure homes are suitable for older buyers in places they want to live.”
Rental market reform and housing allowances
UK Finance’s report also calls for annual reviews of the Local Housing Allowance to ensure it keeps pace with rent increases. The organisation proposes a government-sponsored registration system for rental property owners to help identify rogue landlords and substandard properties, easing the burden on both tenants and landlords.
Charles Roe reiterated the importance of supporting renters and landlords alike, stating, “Improving standards in the private rental sector and supporting the social and affordable rental sectors will be key.” UK Finance also advocates for tax incentives to encourage landlords to invest in energy-efficient upgrades for their properties, which would benefit both tenants and the environment.
Strong action needed across the housing market
In its report, UK Finance makes it clear that the UK’s housing crisis requires urgent, comprehensive solutions from both the public and private sectors. The call for planning reforms, permanent stamp duty cuts, and updated housing allowances are just a few of the measures suggested to address the growing housing shortfall.
Charles Roe concluded, “Everyone needs a safe, secure, and affordable home… the size of the challenge means we need strong action across the UK’s housing market.” With the government’s housing targets in place, the hope is that these recommendations will play a crucial role in helping to deliver more homes and support homebuyers across the country.
As the housing crisis deepens, the focus now turns to the government’s response in the upcoming Budget, and whether these much-needed reforms will be prioritised.
