The Spring Budget Thoughts

ITS TIME TO GO AFTER THE NIMBYS DON'T TAX LANDLORDS,

Will housing be high on  the Chancellors agenda ? will anything be done about the housing crisis ? 

The Spring Budget is upon us ..

Housing supply issues are to do with demand and not enough new homes   being built. There isn’t enough houses available to rent therefore putting the cost of renting a home up another demand problem. Anything in short supply will go up in value just like the issue we had with toilet roll’s during Covid and tomatoes at the moment.

Every house built contributes around £108,000 to the local economy.

The following is a report in the Sunday Times from David Byers Deputy Editor.

Jeremy Hunt is again thought to be considering milking landlords and second-home buyers for more tax in Wednesday's budget.

And for a chancellor in urgent search of new revenue streams, why not? After all, since George Osborne introduced the 3 per cent stamp duty surcharge for those buying additional properties in April 2016, it has been a lovely little earner.

Since 2016-17, government figures show the surcharge has raised £10.1 billion for HMRC and, in the 2021-22 tax year, a whopping 46 per cent of all stamp duty receipts came from buyers who were liable to pay the charge on top of their normal stamp duty.

The abacus looked so inviting that, in April 2021, then-chancellor Rishi Sunak decided to introduce an additional 2 per cent levy to be paid by foreign buyers, which has raised £219 million so far.

On the face of it, there is much to like about another stamp duty rise that targets those for whom most of the public hold the smallest of violins. But in evaluating the success of any policy, we need to work out whether it does anything more than simply bring in money - after all, Osborne originally claimed it was integral to his "bold plan to back families who aspire to buy their own home".

The former chancellor's thesis was that landlords were bed-blocking first-time buyers, and he hoped the extra tax would force them to stop buying in such large numbers, while existing ones would balk at a series of other tax clampdowns announced at the same time and sell up.

But, while the extra stamp duty has raised a lot of cash, 12.2 per cent of properties sold in Britain last year were still bought by an investor, according to the estate agent Hamptons - the highest proportion of sales since 2016.

English Housing Survey data suggested the number of households in the private-rented sector has been unchanged between 2020-21 and 2021-22.

A separate Hamptons analysis calls into question Osborne's philosophy - that landlords and first-time buyers compete with each other. It finds there is only a one-in-five chance that a first-time buyer will find themselves up against an investor.

Meanwhile, first-time buyers are being driven away from the market in their droves because they can't afford a home, particularly since mortgage rates skyrocketed from September onwards (thanks Kwasi) and the government's Help to Buy equity loan scheme ended.

The banking body UK Finance says there were 370,220 first-time buyers in 2022, down from 405,360 in 2021. Savills predicts the number will drop to 200,000 this year.

This all brings us back to the one inalienable fact in all of this - that the only solution to the housing crisis will be to boost our paltry supply. However, the Home Builders' Federation says that as few as 120,000 homes could be built this year

- not even half of the government's

300,000

annual target.

To build more,

Mr Hunt knows he must overhaul our rotten planning system, but that involves confronting the nimbys - aka Conservative voters.

Taxing landlords or second-homers brings nice headlines, but.

won't dent the housing crisis that is short termism.