The chief executive of one of Britain's largest housebuilders has issued a stark warning about the UK property market, calling for immediate government intervention to support first-time buyers while cautioning against excessive environmental regulations.
Market Cooling in Budget's Shadow
Jennie Daly, who leads Taylor Wimpey, stated that the housing market has cooled significantly under what she described as the "very long shadow" of the looming budget announcement. She revealed that her company has experienced a noticeable sales dip in recent months, with the order book also declining in line with industry trends.
Daly expressed particular concern about consumer confidence, noting that "people are just worried" amid widespread uncertainty about potential tax changes. The chancellor's earlier hints about income tax increases and possible stamp duty alterations have created apprehension among potential buyers, she explained.
Call for First-Time Buyer Support
The housebuilding chief highlighted that March marked a significant turning point - for the first time in six decades, there was no direct government support scheme specifically targeting first-time buyers following the expiry of the stamp duty holiday.
Daly advocated for either a similar property tax break or the reintroduction of a help-to-buy equity loan scheme. She suggested that a loan arrangement allowing first-time buyers to secure mortgages at 75%-80% loan-to-value with lower interest rates would "really start to move the first-time buyer into the market" and benefit the wider economy.
Despite her advocacy, Daly admitted having "limited expectations" that such measures would appear in the 26 November budget. The previous help-to-buy programme, which ended in England and Scotland in March 2023, had assisted 387,195 property purchases over the preceding decade, though it faced criticism for inflating house prices and boosting builders' profits.
Regulation Warning and Green Measures
Daly issued a strong warning about what she termed an "accumulation of regulation," particularly concerning environmental standards. While acknowledging the importance of energy efficiency, she argued that current green measures could have "perverse outcomes" by making new home construction unviable in poorer regions.
"These regulations have a disproportionately negative effect in lower price areas," Daly stated, explaining that the high compliance costs mean builders are more likely to focus on areas where they can easily recoup expenses. Build costs, including materials and labour, have surged by approximately 20% in recent years according to industry reports.
The government's forthcoming "future homes standard", expected in December, will require new properties to use low-carbon heating systems like heat pumps instead of gas boilers by 2027, along with increased solar energy usage and improved thermal efficiency.
While Taylor Wimpey has begun implementing new technologies such as air source heat pumps - with trials in Sudbury showing energy bills dropping from £230 to £130 monthly - Daly cautioned that additional requirements like significantly increasing photovoltaic panels on roofs could further escalate costs.
Daly welcomed Labour's planning reforms, which she said were progressing at a "breathtaking pace," and suggested that supporting first-time buyers would help the government achieve its ambitious target of constructing 1.5 million homes within five years.
A government spokesperson responded by highlighting their commitment to building the required homes and mentioned the introduction of a permanent mortgage guarantee scheme helping buyers with deposits as small as 5%.
