The British Property Federation (BPF) has known as on the Chancellor to implement focused tax reforms and prioritise long-term regulatory stability within the upcoming Autumn Price range, warning {that a} “basic and debilitating viability problem” is placing the supply of latest properties, workspaces, and important infrastructure in danger.
In a submission to HM Treasury this week, the BPF highlights the true property sector’s £110bn annual contribution to the UK financial system and its position in supporting one in each 13 UK jobs. It warns, nonetheless, that ongoing viability pressures throughout all asset lessons are threatening this contribution.
The Federation factors to latest indicators, together with July’s S&P International UK Development PMI, which recorded the sharpest contraction in building exercise in 5 years, and a continued decline in Construct-to-Lease (BTR) begins. The September 2025 Deloitte London Workplace Crane Survey additionally reported a second consecutive drop in new workplace building exercise.
The viability disaster is particularly acute within the BTR sector, which performs a important position in housing supply. Development begins fell to only 2,600 properties within the first half of 2025, down sharply from 18,000 BTR properties accomplished in 2024. The BPF argues that the present tax system is undermining the monetary feasibility of high-density housing developments – reminiscent of BTR – which may be constructed out 30–60% quicker than properties on the market.
The Federation warns that with out pressing coverage change, the decline in BTR building may critically derail the federal government’s ambition to ship 1.5 million new properties throughout this Parliament and speed up New City improvement.
Forward of the Price range the BPF’s key asks for the Chancellor are:
Reinstate Stamp Responsibility Land Tax (SDLT) help for top density housing
The abolition of A number of Dwellings Aid (MDR) beneath the earlier authorities in 2024 considerably deprived excessive density housing developed at scale – and has completely eroded the worth of the asset class – notably in much less precious areas. The BPF estimates that the abolition of MDR final yr immediately stalled or hampered the supply of as much as 25,000 BtR properties – and are calling for focused help to be reinstated, to help the supply of excessive density housing.
Prolong Empty Property Enterprise Charges Aid to 12 months
Because it stands property house owners are liable to pay enterprise charges on empty business properties after three months for retail and workplace buildings, and 6 months for bigger logistics buildings. That is inadequate – evaluation of 1000 retail areas by the BPF discovered that simply 9% of empty retailers are re-let in six months – exhibiting how out of step the present aid is with precise reoccupation occasions. This not solely provides to the chance of speculative improvement – by hampering viability of developments and refurbishments – however actively takes away capital on the very level property house owners want to hold out refurbishment and vitality effectivity enchancment works. BPF evaluation reveals that 83% of business properties in our 7 greatest cities are under EPC B – underlining the pressing want for sustainability enhancements to our business property inventory.
Take away council tax on newly developed BTR properties
At present new BtR properties are chargeable for council tax three months after completion, however the letting of bigger developments delivering a whole bunch of a lot wanted properties usually takes 12 months or extra. The present system successfully penalises excessive density housing developments which can be built-out shortly – by including a big tax price that wouldn’t happen on low-density schemes that are constructed out at a slower tempo.
Prolong zero-VAT for vitality saving supplies
With a purpose to make the refurbishment of older rented housing inventory viable the BPF is looking for all vitality saving supplies and heating gear to be zero-VAT rated. Because it stands, zero-VAT is simply relevant when vitality environment friendly enhancements are delivered on a standalone foundation reasonably than as a part of a wider refurbishment.
Melanie Leech, chief govt, British Property Federation mentioned: “The information is stark. With out focused interventions from Authorities to handle the event viability disaster key authorities priorities reminiscent of 1.5 million new properties and the Industrial Technique won’t be delivered.
“As long-term buyers in communities throughout the nation, our members wish to harness home and international capital to help the supply of New Cities at tempo; and put money into extra productive workspaces, new properties for all levels of life, and the buildings and public areas that underpin trendy, cohesive communities. But regardless of welcome strikes to reform the planning system, investor sentiment stays fragile, as evidenced by the collapse in building exercise throughout the UK. There are just too many layers of regulation, tax and levies on new improvement which is at odds with the dedication to ‘again the builders’.
“We admire the fiscal strain the federal government is beneath, however we urge the chancellor to not underestimate the price of inaction – the federal government won’t elevate any taxes and levies on improvement that doesn’t occur. Solely by addressing the event viability disaster will the federal government unlock the financial progress and funding we have to see throughout the nation.”
Housing secretary: Miss the 1.5m properties goal, I’m out
