A stamp duty proposal could give prospective homebuyers an "18-month holiday" before eventually paying the levy, which analysts are urging Chancellor Rachel Reeves to consider.
Financial services provider Aldermore has unveiled two major policy proposals in advance of the tomorrow's Budget, aimed at revitalising the UK housing market.
The firm is advocating for an 18-month suspension of stamp duty on newly built properties valued below £500,00, which would offer much needed assistance to buyers.
Additionally, Aldermore is urging ministers to reintroduce the Help to Build programme, which would see the Government provide a 20 per cent equity stake in new properties when purchasers contribute just five per cent as a deposit.
Analysts are urging the Chancellor to consider stamp duty reform in her Budget
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Stamp duty is a tax levied on property purchases valued above £125,000, beginning at five per cent and rising to 12 per cent on homes bought for over £1.5million.
Relief is available for homebuyers with those purchasing their first home not needing to pay any stamp duty if the property is bought for over £300,000.
These recommendations emerge from research conducted by the lender, which surveyed 2,000 potential first-time purchasers through their First Time Buyer Index.
The research revealed significant appetite for Government intervention among aspiring homeowners with Labour pledging to get more young people on the property ladder.
Britain is facing a housing crisis | PAMore than two-thirds of respondents, around 68 per cent, believe both ministers and the mortgage sector should develop more innovative support mechanisms.
Nearly 70 per cent of those surveyed in Aldermore's poll expressed backing for bringing back the Help to Buy initiative as one of the reforms in Ms Reeves's Budget.
The study also found that 35 per cent of potential homebuyers in Britain desire enhanced backing for affordable housing provision. Almost a quarter of participants specifically identified stamp duty reductions or elevated thresholds as their preferred form of assistance.
These findings underscore widespread frustration among first-time purchasers seeking routes onto the property ladder. Small and medium-sized property developers face particular challenges that larger firms avoid, according to Aldermore's analysis.
These builders encounter excessive bureaucracy and administrative hurdles that hamper their operations disproportionately.
The Labour Government's ambition to construct 300,000 properties annually remains elusive, with current completion figures falling short of this objective.
Danielle Soto, the managing director for Savings and Business Finance at Aldermore, stated: "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."
She emphasised that smaller developers require stability and confidence to expand their operations effectively.
The current stamp duty framework requires buyers in England and Northern Ireland to pay tax on properties exceeding £125,000 | GETTYAldermore's proposed Help to Build proposal would ideally enable smaller construction firms to re-enter the marketplace and boost housing delivery in regions where large developers show limited interest.
Ms Soto highlighted the importance of supporting both builders and buyers amid Britain's ongoing housing crisis.
"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," she said.
The savings expert acknowledged that whilst no single measure would solve the housing crisis, these interventions would deliver substantial benefits to SME builders and aspiring homeowners alike.
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