Shane Miller‑Bourke, co‑CEO of Spring, explains how a lack of liquidity in the market, largely due to Stamp Duty, is playing a key role in the under-delivery of new homes.
UK housebuilding is facing a pronounced slowdown. Planning permissions have fallen to a 15‑year low, and project approvals dropped by almost a third toward the end of 2025, well short of the 250,000 homes a year the country needs. While planning reform rightly commands attention, it is only one part of a much wider system that is no longer functioning smoothly.
I am not a developer, so I will leave the technicalities of planning and construction to those who specialise in it. But as someone working with buyers and sellers every day, I do know this: without a more liquid housing market, it will be impossible to unlock the scale of delivery the new homes sector urgently needs.
Liquidity matters because housing in England is largely a chain‑based system. Most transactions rely on two or three linked sales – often more in urban areas. When one part of the chain breaks, the entire transaction collapses. In 2024, around 30% of agreed sales fell through. Each failure typically costs sellers between £2,700 and £3,200 in wasted legal, survey and moving expenses, not to mention the emotional toll. For developers, this fragility translates into slower sales rates, reduced certainty and elongated cash conversion cycles.
One of the most significant, yet under‑discussed, contributors to this lack of liquidity is Stamp Duty Land Tax (SDLT). In a recent report commissioned by Spring and carried out by Volterra, we describe SDLT as a “frictional tax” – one that actively suppresses movement. Our modelling shows that a 1% increase in SDLT reduces annual transaction churn by around 3.5%, hitting downsizers, job movers and family upsizers hardest.
It is important to be clear about the current position. Property traders such as Spring, which enable guaranteed purchases of homes on agreed dates in a matter of weeks, already receive SDLT relief when purchasing new‑build homes. That relief does provide some liquidity to the new homes market and allows traders to support developers with improved pricing and greater certainty. But crucially, that is where the relief stops.
The real blockage sits in the rest of the market.
Where property traders cannot make use of one of the few existing narrow and arbitrary SDLT reliefs, largely in transactions where sellers move to a second-hand property, we face the Higher Rates for Additional Dwellings (HRAD), a 5-percentage point SDLT surcharge. This extra blow comes despite traders not being long‑term investors and despite holding stock only temporarily to facilitate transactions. By stopping many transactions dead in their tracks, this significantly constrains traders’ ability to provide the essential liquidity that the market relies on.
If SDLT reform were extended to the wider market, through HRAD removal or broader relief for traders, the impact on market liquidity could be transformational.
The modelling in our report is striking. Removing the HRAD surcharge alone could increase trader activity by 178%. A full SDLT exemption for traders could increase it by 480%. Depending on the scenario, this could translate into up to 168,000 additional housing transactions per year, over half of the government’s headline annual housing target.
Why does this matter? Because the more homes that are traded through companies like Spring, the more guaranteed sales the market sees. Traders fix chains, absorb risk and remove uncertainty. Each successful intervention reduces the probability of collapse, lowers wasted costs for consumers and creates confidence for developers to build and sell at scale.
The benefits then cascade through the entire housing system. More liquidity means more older homeowners are able to move, addressing chronic under‑occupancy and freeing up much‑needed family homes. When more family homes are released at the top of the ladder, more households can trade up. As those households move, space is created for first‑time buyers to enter the market. Increased first‑time buyer demand, in turn, underpins new housing delivery.
That delivery has wider economic consequences. Housebuilding is one of the UK’s most powerful economic engines, supporting hundreds of thousands of jobs, strengthening local labour markets and contributing tens of billions of pounds to national output. A more confident, fluid housing market supports a stronger economy, full stop.
There is also a further, often overlooked benefit of wider SDLT reform for traders. With reduced transaction costs, property trading businesses could acquire far more homes in poor condition – such as those often owned by elderly sellers – where traditional buyers struggle to proceed. These purchases not only release homes back into use but do so more quickly, speeding up transaction timescales and injecting additional liquidity into parts of the market that are currently stagnant.
The message is clear. Planning reform is necessary, but it is not sufficient. If we want a housing market that genuinely works, one that supports mobility, frees up underused homes and gives builders confidence to deliver at scale, we must also address the frictions elsewhere in the system.
Modest SDLT reform focused on liquidity could deliver outsized results. And given the scale of the housing challenge we face, it is a lever we can no longer afford to ignore.
