RSM UK’s own research has prompted it to call on the Government to review planning reforms and tax policy to improve viability of UK housing developments and speed up delivery.

In an open letter to Matthew Pennycook MP, Minister of State for Housing and Planning, the leading audit, tax and consulting firm urged the Government to consider a range of options to help stimulate growth in the market, including the reintroduction of the multi-dwelling relief (MDR), a tax relief on Stamp Duty Land Tax, abolished in 2024.

RSM UK say delays to planning applications, increasing costs and high taxes are making many residential developments unviable, threatening government housing targets. The Spring Statement did not include the fiscal or market interventions needed to restore confidence and boost delivery at scale.

According to RSM UK’s latest Real Estate 360 report, a survey of over 270 business leaders in real estate, over a third (39%) said the increasing cost of development is now the biggest barrier to meeting the Government’s housing target, while over a quarter (26%) say planning challenges are the biggest barrier.

Over half (58%) said they don’t believe the Government can meet its target to build 1.5m new homes by 2029, up from 54% last year. Only a quarter (26%) said they think the Government can still meet its target, indicating the sector has lost confidence in current plans.

Stacy Eden, Partner and National Head of Real Estate at RSM UK said: “Short-termism and a piecemeal approach to increasing housing supply is currently holding the industry back. That’s why we’ve called for greater urgency and for the Government to reconsider policy and tax reform. We’re asking for government to work with the sector to continue to streamline the planning process, remove unnecessary red tape and reduce taxes on the industry, speeding up Gateway 2 approvals. Reconsidering abolished tax relief will also be a good start in stimulating the market, in desperate need of some injection to ensure developments become more viable.”

When it came to government incentives to improve viability, a third (33%) said that abolishing Stamp Duty would help, while 28% said more investment in the supply of skilled workers was needed. A further 28% said first time buyers need more support to get on the housing ladder, and a quarter (24%) said investment in planning officers would speed up real estate applications.

Stacy Eden concluded: “While we recognise that some factors impacting housing supply are mainly outside government control, lengthy planning processes, high taxes, and a lack of skilled workers are all currently holding the sector back. A long-term, holistic approach to overhauling planning policy is urgently needed from government to enable the sector to thrive.”

Melanie Leech, Chief Executive of the British Property Federation, said: “RSM’s report echoes what BPF members have been saying for many months – despite the Government’s best intentions and some welcome planning reforms, development viability is severely challenged across the country. Recent announcements such as the next wave of New Towns will take some time to gear up – in the meantime the development industry needs Government to take urgent measures on the cost of building to unlock homes and commercial space. One immediate action that would support new homes would be the reintroduction of a form of Multiple Dwelling Relief, which would be a shot in the arm for Build-to-Rent developments, in turn unlocking viability for lager housing sites.”

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