Berkeley urges Reeves to rule out tax rises as new-build output falls to crisis-era lows

Berkeley Group has urged Chancellor Rachel Reeves to rule out fresh tax increases on housebuilders in the upcoming budget, warning that additional levies would reduce the number of new homes delivered as the sector suffers a prolonged downturn.

Official data published this week showed just 38,780 new homes were completed between January and March, a level described by builders as roughly half the quarterly rate required to meet the government's target of 1.5 million new homes by 2029. The construction industry is enduring its longest slump since the start of the pandemic, and London’s new-build output has fallen to its weakest level since the global financial crisis.

Berkeley, which develops across London, Birmingham and the south of England, said on Friday that ministers must go further than current planning reforms and pursue wider deregulation to boost output. The company argued that uncertainty over tax policy for the sector would further deter investment at a time when build costs, higher mortgage rates and delays in planning approvals are already constraining deliveries.

Housebuilders have repeatedly cited elevated materials and labour costs, tighter financing conditions and a backlog of planning decisions as key factors behind the shortfall in new-home supply. The latest quarterly completions figure, released by official statisticians, highlights the scale of the gap between current construction activity and ministers’ stated ambitions.

Housing Minister Angela Rayner has set a target of 1.5 million new homes by 2029, a goal that requires a sustained and substantial increase in building rates across the country. Industry representatives have told the Treasury and levelling-up departments that achieving that figure will depend not only on planning reform but also on measures to reduce the cost and complexity of delivering developments.

The appeal to Chancellor Reeves comes ahead of a budget in which the government will outline its fiscal priorities. Berkeley’s intervention reflects concerns across the housebuilding sector that new taxes or regulatory burdens could reduce the incentive to build, with immediate implications for supply and longer-term effects on affordability.

Analysts said the latest data will increase pressure on policymakers to consider a package of measures aimed at stimulating construction activity, ranging from targeted deregulation to support for infrastructure and skills development in the sector. Developers and trade groups are expected to press the case for policies that address planning delays and the rising cost base facing projects of all sizes.

Ministers have previously pointed to planning reform as a central plank of their housing strategy. With quarterly completions continuing to lag the pace required to meet the 2029 target, the debate over whether to combine deregulation with fiscal incentives or constraints is likely to intensify in the run-up to the budget.

Whether further government action will be sufficient to reverse the recent slump in output remains to be seen, but the industry’s message to the Treasury is clear: proposals that increase costs for housebuilders risk reducing the number of new homes delivered at a time when supply is already well below the government’s stated objective.