House builder, Redrow, estimates that completions will be reduced by as much as 20% in the next financial year, causing the company to renew its call for changes in stamp duty.
Stamp Duty Land Tax (SDLT) is a tax levied by the UK government on all land and property transactions. The amount of the tax depends on the value of the property, with higher-value properties attracting higher rates of SDLT.
Redrow’s chief executive, Matthew Pratt, made his comment following the release of the company’s 2023 figures. Share holders were relieved that revenue was almost flat at £2.13 billion, despite lower volumes of house sales. Redrow completed on 5,436 new homes in the twelve months to July 2023, 5% fewer than the previous year.
Homes in the company’s Heritage Collection increased in selling price by 9% to an average £473,000. These detached properties include heat pumps and underfloor heating.
There was stronger demand for affordable housing, where sales value increased by 25% to £258 million.
Mr Pratt said that targeted sales incentives were used to convert buyer interest in a market where the cost of living and mortgage affordability continued to impact negatively on the housing market.
He initially raised stamp duty a hurdle in 2021, after the company posted a half year profit increase of 11% and announced that legal completion had increased by 20%. At the time he described stamp duty as an “arbitrary tax” that “inhibits mobility and reduces the liquidity of the housing market” that “penalises those looking to relocate for work or wanting to downsize as part of retirement plans.”