Steve Reed takes on housing challenge following Rayner's resignation over stamp duty row

Steve Reed OBE has been appointed secretary of state for housing, communities and local government following the resignation of Angela Rayner. Reed, the MP for Streatham and Croydon North since 2012, will take on the housing brief after serving 14 months as secretary of state for environment, food and rural affairs.

Reed inherits the mandate to oversee the building of 1.5 million new homes during the current Parliament, as the Home Builders Federation (HBF) warned that the number of residential units receiving planning permission is at its lowest quarter total since 2012.

In its Q2 housing pipeline report, the HBF noted that the number of residential units approved fell by 6% during the second quarter of 2025, extending the decline seen during the first three months of the year. The number of housing projects granted planning permission in Q2 dropped by 33% compared to the previous quarter and was 45% lower than a year ago.

Commenting on Reed’s appointment, the Federation of Master Builders (FMB) said the move must signal the start of a new drive for delivery of the 1.5 million new homes target.

FMB chief executive Brian Berry said:

“The former Housing Secretary made several high-profile announcements aimed at getting Britain building again, but the sad fact is that the number of new homes has fallen short of the 300,000 that are needed each year. Support for first time buyers is non-existent and the proposed planning reforms to speed up development have yet to materialise.”

In his response to Rayner’s resignation, the prime minister praised the former housing secretary’s progress in homebuilding, describing her work to help build the homes Britain needs as ‘hugely important’.

The comment was part of a handwritten response shared on Friday, in which Sir Starmer also acknowledged Rayner’s ‘central part’ in the plan to make Britain fairer for working families. However, Rayner acknowledged that the decisions she had made in relation to the purchase of her Hove flat ‘did not meet the highest standards’.

She added:

“I deeply regret my decision not to seek additional specialist tax advice given both my position as Housing Secretary and my complex family arrangements. I take full responsibility for this error… Given the findings, and the impact on my family, I have therefore decided to resign as Deputy Prime Minister and Secretary of State for Housing, Communities and Local Government, as well as Deputy Leader of the Labour party.”

The resignation came following a report by the prime minister’s ethics adviser Sir Laurie Magnus CBE, in which he concluded Rayner’s actions surrounding the purchase of the flat and subsequent underpayment of stamp duty amounted to a breach of the Ministerial Code.

‘I believe Ms Rayner has acted with integrity and with a dedicated and exemplary commitment to public service’, Sir Magnus wrote in his report.

“I consider, however, that her unfortunate failure to settle her SDLT liability at the correct level, coupled with the fact that this was established only following intensive public scrutiny, leads me to advise you that, in relation to this matter, she cannot be considered to have met the “highest possible standards of proper conduct” as envisaged by the Code. Accordingly, it is with deep regret that I must advise you that in these circumstances, I consider the Code to have been breached.”

As Karl Pocock, partner and head of corporate tax at Birketts LLP pointed out, stamp duty is notoriously complex, with rates and reliefs varying depending on the purchaser’s circumstances and the legal structure of the transaction. ‘As the Angela Rayner case illustrates, the correct tax treatment may not be immediately obvious – even to those receiving professional advice’, he said.

“In her situation, the interplay between trust law, property ownership, and specific SDLT rules led to an underpayment of £40,000, despite initial legal guidance suggesting otherwise.

“While most property purchases are straightforward, the intricacies of SDLT legislation – especially where trusts or multiple residences are involved – can produce unexpected outcomes and the unwary can be caught out with expensive consequences. Although the vast majority of acquisitions are straightforward, the vagaries of much amended legislation can lead to surprising results.

“In such cases, tailored advice from qualified tax professionals is essential to avoid costly mistakes, which, in Ms Rayner’s case, has gone beyond a financial cost following her resignation.”

The conveyancing firm at the centre of the row, Verrico & Associates Ltd in Herne Bay, Kent, insisted they had never given tax or trust advice and always referred clients to accountants and tax experts. Managing director Joanna Verrico added:

“The stamp duty for the Hove flat was calculated using HMRC’s own online calculator, based on the figures and the information provided by Ms Rayner.

“That’s what we used, and it told us we had to pay £30,000 based on the information provided to us. We believe that we did everything correctly and in good faith. Everything was exactly as it should be.”