The recent changes to stamp duty on additional properties has been contested by Alan Brown, Chief Executive of home builder, Cala Homes.
Whilst reporting upon the company’s jump in pre-tax profits earlier this month, Brown expressed his hope for the issue to be addressed in the Autumn statement, describing the stamp duty increases as a “step too far”.
The profits prior to tax of Cala Homes have jumped by 18% up to £60.1 million with a revenue reaching £587.1 million; a rise of 15%. The firm is owned by Patron Capital and Legal & General, a group which has recently invested heavily in modular building techniques as well as the private rental sector.
Brown explained his concern surrounding Cala and the impact the increased duty may have upon the second-hand market: “We cater to the downsizing market and they are finding it challenging to put their home on the market because of the high levels of stamp duty.”
He similarly commented on the whole of the market being affected indirectly. The final week of September saw stamp duty receipts to have dropped by 3% with experts in the market predicting this fall would only increase in 2017.
Cala largely focuses upon construction in affluent areas throughout the UK, building high-end homes in Scotland, the Midlands and close to the M25. Selling prices average at around £538,000; a figure substantially higher than the general UK average of £202,389.
The company has however stated it would start to build fewer houses within this particular bracket due to the slowdown in demand for homes worth over £1.25 million. This figure made up 5% of sales.