Finance (No.2) Bill

Peter Aldous Excerpts

3rd reading
Thursday 23rd May 2024 Commons Chamber

[Peter Aldous (Waveney) (Con)]

May I start by paying tribute to you, Madam Deputy Speaker? The best type of umpire or referee is one who is formidable but fair and greatly respected, and you tick all three boxes. I am most grateful to you for calling me to speak. I do so as I have some concerns about unintended consequences arising from clause 7, which is on the abolition of multiple dwellings relief for stamp duty land tax. My hon. Friend the Minister set out some of the reasons for abolishing it. I wish to go a little further and perhaps pry a little more response out of him to allay those concerns.

I make these observations as a former chartered surveyor, as the MP for a constituency that might be adversely affected and having received representations from the British Property Federation. I am aware that a number of pension funds, investors, builders and professional advisers have written to my right hon. Friend the Chancellor of the Exchequer expressing their concerns.

The build-to-rent sector rose from a combination of the introduction of stamp duty land tax multiple dwellings relief in 2011 and the implementation of some of the Montague review’s recommendations in 2012. Subsequently, it has been extremely successful. Some £40 million has been invested in the build-to-rent sector, resulting in 100,300 additional homes being completed, with a further 166,000 in the planning and delivery pipeline. The sector still represents a relatively small proportion of the delivery of new homes, but it is growing rapidly. The number of completed build-to-rent homes increased by 17% year-on-year in the fourth quarter last year. Investors and developers initially focused on London, then the larger cities such as Manchester, Birmingham and Leeds. Now, their interest is rippling right out across the UK.

Build to rent acts as an anchor in large development schemes. It helps get homes of other tenures built, and multiple dwellings relief enables much-needed homes to be built outside London and the south-east in areas where there are lower property values and development otherwise would not be financially viable. My concern is that the abolition of multiple dwellings relief in the form proposed could have a variety of unintended consequences, which I will go through briefly. First, as I know from my own inbox and postbag, which I anticipate is the case for all colleagues, we need to build more homes to rent. The Bill potentially removes one of the ways of doing that. Secondly, it will have an impact on specialist sectors—student accommodation and sheltered housing—where, in response to demand, developers are increasingly looking to provide units to let.

Thirdly, the relief is most needed in areas where the property market is weaker—outside London and the south-east—and often in areas where the need for more housing is most acute. Fourthly, we have a problem in the UK of too few house builders. The small and medium-sized house builder is an increasingly endangered species. Clause 7 could undermine an alternative means of housing delivery.

Finally, I am mindful of the enormous task of urban regeneration and town centre renewal that we face right across the UK—in other words levelling up, which has been the theme of much of this Parliament. This task is enormous and incredibly expensive. It is neither practical nor possible for the state to do that heavy lifting on its own. Private finance must be leveraged in from pensions funds and investors. Multiple dwellings relief is a means of doing that. Some might say it is a small thing, but its abolition could send a negative message that there is no place for the public and private sectors to work together.

We could amend clause 7 to retain the multiple dwellings relief for transactions of six or more dwellings, on the basis that it would underpin the development proposals of large rented housing schemes, and would result in significantly more rental homes being built than if the relief were completely abolished. The threshold of six mirrors the existing rule that purchases of six or more dwellings can be treated as a commercial property transaction for stamp duty land tax purposes, and is at a level at which multiple dwellings relief is hard to abuse.

I would be grateful if my hon. Friend the Financial Secretary to the Treasury, who has been incredibly patient listening to my various concerns about this Bill during its course, could comment a little more and seek to allay my genuinely held concerns.