Small developers could be priced out by government’s new tax, says RICS
Research by the Royal Institution of Chartered Surveyors suggests that the UK government’s proposed planning gain supplement will drive small developers out of the housing market. The government could then miss its target of 200,000 new homes a year. The proposed land tax could cut small developers’ profit margins to uneconomic levels, leaving them no choice but to exit the residential building market.
This situation could leave first time buyers and homeowners in a tight property market in which demand far exceeds supply. RICS Head of Policy, Brian Berry, commented: ‘ This is a prime example of the government shooting itself in the foot. The research clearly demonstrates that PGS fails to achieve the Government’s stated objective to raise additional money for infrastructure. The mechanics are flawed and need to be reworked.’
RICS estimates that 55 per cent of the 30,000 homes built in England since 2001 have been constructed by small developers.