Today, Chancellor Phil Hammond is defending the freeze on stamp duty for houses under £300,000 that he introduced in Wednesday’s budget. What was supposed to be a giveaway to young people looking to buy their first home will in fact benefit people who already own homes, according to the Office of Budgetary Responsibility, and raise house prices by 0.3 percent.
While Phil deals with that furore, the rest of the housing measures in the manifesto also deserve a look. A close reading of the housing section of the budget shows you just whose side the government is on. Theresa May’s great moral mission to solve the housing crisis involves a series of bungs to the construction industry (or should that be "financial incentives"?) and weak words.
The first clue is in the second paragraph of the housing section of the budget, which says, "The cost of housing near the most productive centres of employment has become a barrier to productivity growth. High house prices can prevent people from living near the best job opportunities for them, limiting the productivity of companies that might have employed them." Phil used his budget speech to talk about "the dream of home ownership", but it could be the concerns of business and the economy that are at last prompting the government into action on housing.
That would be no big deal if the rest of the document didn’t propose to solve the housing crisis in the most agreeable possible way for those who are profiting from it.
Particularly concerning is the promise of a £1.1 billion fund to "enable Homes England to work alongside private developers to develop strategic sites, including new settlements and urban regeneration schemes". So that sounds like over a billion pounds of public money to help developers identify former council estates to demolish and replace with swanky flats, displacing existing communities. Another pledge reads: "The Budget provides £400 million of loan funding for estate regeneration to transform run-down neighbourhoods and provide new homes in high‑demand areas." Very few conditions are placed on how redevelopment should happen, apart from some commitments to build "affordable" homes, which are not really affordable at 80 percent of market rates. So, we can probably expect more state-led gentrification in the name of "solving the housing crisis".
As for landlords exponentially increasing rents every year, or the people who have been forced to live in five places in three years because of these rental hikes, "The government will consult on the barriers to landlords offering longer, more secure tenancies to those tenants who want them." I’m sure parasitic landlords will be waking up in cold sweats at the thought of being consulted.
Phil also had strong words for the oligarchs and oil barons parking their money in UK property as an investment, and keeping houses empty: "It can’t be right to leave property empty when so many are desperate for a place to live."
The Budget document explains the detail: "Local authorities will be able to increase the council tax premium from 50 percent to 100 percent." This would in effect double council tax on empty properties. Funnily enough, that’s the same policy Labour’s Ed Miliband proposed in 2014. It wasn’t enough then and it’s not enough now.
Empty property expert Paul Palmer told me it wouldn’t work. "This will make more owners 'hide' their empty homes. Expect to see a lot more empty homes suddenly become 'second' homes," he said. And as for the double council tax, it’s not enough to scare an oligarch with a property investment: "We are talking £1,000 per year becoming £2,000 per year."
While Hammond defends a giveaway to first time buyers which is actually a boon to homeowners, there are plenty more measures that are not all they're cracked up to be.