BMF urges Chancellor to boost housing and cut the cost of doing business

The BMF (Builders Merchants Federation) has written to the Chancellor in advance of next month’s Budget urging him to take action on housing, social mobility, inheritance tax and the cost of doing business to stimulate local economic growth and enhance regional productivity.

On housing and social mobility, the BMF argues that Stamp Duty Land Tax is a constraint on housing transactions, that discourages people from moving at a time when social mobility is vital to support local labour markets.  The BMF also highlights the struggle young people face to find decent, affordable housing and to get on the property ladder.

John Newcomb, CEO of the BMF said:

“The Office of Budget Responsibility estimates that for every 1% cut in SDLT, transactions may increase by up to 6%.  Cutting the SDLT rate to 1% for first time buyers and for older people ‘right-sizing’ to smaller homes and changing the thresholds for all buyers would energise the property market and ease affordability pressures.

“We would also like to see more help for first time buyers, via an equity loan scheme whereby developers cover a portion of the upfront investment that enables the government to retain the full equity share.”

The BMF also highlighted the burden of regulation and taxation on its members, which has added to the cost of doing business to such an extent that many predict they will not make any money this year. 

These challenges are compounded for the overwhelming majority of BMF merchants that are family-owned, local independents, for whom Inheritance Tax and the recent changes to Business Property Relief are a further cause for concern.  Many of these companies are run by fourth or fifth-generation descendants of the founders, but will find it hard, if not impossible to pass their business on to the next generation to keep serving the local community.

John Newcomb concluded:

“There is a huge opportunity for the government under a new Prime Minister and Chancellor to apply fresh thinking and shift government policy away from heavy taxes on business that stifles growth, to one where entrepreneurial risk is rewarded and investor confidence returns to boost output and employment.

“The government understands the urgent requirement for new homes of all tenures, which is welcome news for our sector. Ministers must use all available powers to foster a viable, functioning house-building market, and understand that encouraging the involvement of smaller firms is critically important to get anywhere near the 1.5 million new homes target.”