Planning reform and a review of property taxation could help revive the sluggish housing market, RSM UK has said after average prices recorded little monthly movement.
The UK House Price Index showed that house prices rose by 0.3% on a non-seasonally adjusted basis between April and May 2026 and were unchanged after seasonal adjustment.
The average UK house price was £271,000 in May, an increase of £7,000 from a year earlier and equivalent to annual growth of 2.7%.
London recorded the weakest performance, with prices falling by 3.7% in the year to May and by 1.2% during the month.
Stacy Eden, national head of real estate at RSM UK, says: “The May house price data is unsurprising, highlighting stagnation in the housing market as house prices flatline. This is particularly evident in areas of high house prices such as London, where penal rates of Stamp Duty Land Tax (SDLT) are most keenly felt.
“As Andy Burnham begins his premiership, we’d urge the new prime minister to prioritise a review of planning reforms and tax policy to help stimulate the UK’s stagnating housing market.
“RSM’s latest Real Estate 360 report showed that, when it came to government incentives to improve housing viability, a third of real estate business leaders (33%) felt that abolishing Stamp Duty could provide a market boost.
“Over a third (39%) said increasing development costs, which Stamp Duty adds to, are the biggest barrier to meeting government housing targets, while quarter (26%) cited planning challenges.”
Eden adds: “Andy Burnham’s premiership may mean a review of Stamp Duty is on the cards, as he has previously expressed his dislike of the tax. However, scrapping Stamp Duty altogether, or replacing it with an alternative, will need some careful thought, as it brings in around £15 billion a year in revenue.
“We’d like to see the government revisit current policy to create a fairer and less penal system. Currently buyers are put off moving due to high stamp duty fees, significantly decreasing liquidity and transactions in the market.
“While we recognise some of the issues impacting housing supply are outside of the government’s control, high taxes, long planning processes, and a lack of skilled workers are all currently hampering housing development.
“Research from the Home Builders Federation (HBF) reveals that £76,000 has been added to the cost of building a home since 2020, of which £30,000 is due to increased regulation and taxation.
“We’d like to see Andy Burnham’s government take a more long-term and holistic approach to planning policy and real estate taxation, which would enable the sector to thrive and improve the viability of developments. Introducing a penal land tax would again be another cost for developers to consider, stymying growth.
“We expect the underlying trend of subdued growth, with declining prices in some areas, to persist over the coming months, particularly as the 10-year gilt rate seems to be edging upwards as concerns around the UK’s fiscal position remain.”
