According to analysis from the Intermediary Mortgage Lenders Association (IMLA), the Treasury is facing a £30bn-40bn fiscal gap in the Autumn Budget. However, all the property tax ideas, which include a new annual property tax, council tax reforms and capital gains tax (CGT) on main residences, would raise less than £6bn.
Kate Davies, executive director of IMLA, said: “These numbers simply don’t move the dial. The Chancellor should resist the temptation to reach for politically easy but economically damaging options. Most of the property-related measures being discussed would deliver minimal revenue, take years to implement and undermine confidence in the housing market.”
She said it should focus on “big-ticket reforms” that can generate “significant income more quickly”.
“Tinkering with the housing market will not deliver what the government needs. If ministers want growth, they should look at broader, bolder measures that can genuinely raise revenue and support investment. Small, piecemeal tax changes will just add uncertainty, hurt confidence and slow activity at exactly the wrong time,” Davies added.
She said boosting housing transactions would be a “major driver” of economic activity, as it would support jobs across multiple sectors, and a slowdown will have knock-on impacts across the economy.
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A recent survey found that a fifth of UK homeowners were putting sale plans on hold due to the Autumn Budget.
Davies said: “Boosting housing activity is one of the fastest and most effective ways to stimulate wider growth. Dampening it will have the opposite effect. The inevitable result of squeezing landlords and homeowners further will be fewer rental homes, higher rents and more misery for renters.”
The IMLA called on the government to “develop a coherent housing strategy” that brings in private finance to support new building and long-term investment, rather than “fiddling around the edges with short-term, politically motivated tax tweaks”.
“Uncertainty is deeply damaging to business confidence. We may not like every decision the Chancellor takes, but the market will respond far better to clarity and conviction than to dithering and indecision,” Davies added.
