The Intermediary Mortgage Lenders Association (IMLA) has warned the Chancellor not to use the housing market as a convenient target for tax rises in November’s Budget.

According to the mortgage trade body, such measures would “fail to raise meaningful revenue” and could instead “choke off economic growth”.

With the Treasury facing a fiscal gap of £20bn to £40bn, IMLA suggested that all the property tax ideas that have so far been floated by Rachel Reeves, including a new annual property tax, council tax reform and capital gains tax on main residences, would together raise less than £6bn.

Executive director of IMLA, Kate Davies, said the numbers “simply don’t move the dial”.

“The Chancellor should resist the temptation to reach for politically easy but economically damaging options,” Davies commented. “Most of the property-related measures being discussed would deliver minimal revenue, take years to implement and undermine confidence in the housing market.”

Davies added the Government should instead focus on big-ticket reforms capable of generating significant income more quickly, even if this would mean making politically difficult choices.

IMLA is also urging the Government to develop a coherent housing strategy and has called for an approach that harnesses private finance to support new building and long-term investment, rather than focusing on short-term tax tweaks.

“Tinkering with the housing market will not deliver what the Government needs,” Davies said. “If ministers want growth, they should look at broader, bolder measures that can genuinely raise revenue and support investment. Small, piecemeal tax changes will just add uncertainty, hurt confidence and slow activity at exactly the wrong time.”

She added: “Boosting housing activity is one of the fastest and most effective ways to stimulate wider growth.

“The inevitable result of squeezing landlords and homeowners further will be fewer rental homes, higher rents and more misery for renters.”

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