The banking body says these are just some of the reforms needed to address the UK’s 4.3 million housing shortfall in its new report, ‘Homes We Need’.

Its study follows the new Labour government’s pre-election pledge to build 1.5 million homes over the next five years. Over the previous five years the country built one million homes.

Chancellor Rachel Reeves unveils her Budget on 30 October, which the government says will include “painful” tax and spend measures, but also promises to “get Britain building again”.

UK Finance says: “The new government has acted quickly to encourage more housebuilding and ensure that affordable housing is a key part of its new targets.

“However, the progress needed will not be achieved without cooperation across the public and private sectors.”

The banking body’s recommendations include:

Planning

• An overhauled planning system should accommodate different types of housing development for first‑time, second- steppers, last‑time buyers and renters
• Planning rules across England, Scotland, Wales, and Northern Ireland should have more “consistency”
• Developers need confidence that “meeting the set criteria would guarantee approval for their projects”

Stamp duty

• Keeping stamp duty nil‑rate bands at their current, temporary, level  of £250,000 for all transactions and £425,000 for FTBS — instead of reverting to previous levels in 2025 that are £125,000 lower in each case
• Introduce a stamp duty exemption for last‑time buyers to reduce the upfront costs of moving, “which may currently act as a disincentive to downsize”

Renters

• Regularly increasing the Local Housing Allowance, which sets housing benefits, so that it keeps pace with rental market changes, which would mean more properties in the private rental sector will be accessible to people on social housing waiting lists

The report acknowledges that this allowance was increased in April, but says “this was a one-off adjustment rather than an annual update”.

Audley Group chief executive Nick Sanderson says: “A stamp duty cut for downsizers should stimulate movement at the top of the market, encouraging people to move out of large family homes, but it’s important to remember that a financial incentive is just one part of the puzzle.

“There is a chronic lack of age-specific housing in the UK. If we aren’t giving people the properties to move into, in the right locations, the stimulus can’t achieve its full potential.

“A minimum of 50,000 new units are needed every year to keep up with the ever-rising demands of the ageing population.”

UK Finance director of mortgages Charles Roe adds: “Our new report sets out a range of recommendations to complement the government’s plans.

“These include making the planning process simpler, removing some of the barriers first-time buyers face and ensuring we’re meeting the housing needs of our ageing population. Improving standards in the private rental sector and supporting the social and affordable rental sectors will also be key.”