Autumn Statement 2014 stamp duty give away will do nothing to solve the housing crisis
Many eyes will be on the stamp duty tax cuts announced in the autumn statement today, but this will do little to address the UK’s entrenched housing crisis. A very unpalatable truth for supporters of the current government is that total home ownership has declined in every year since 2008.
The autumn statement supporting document highlights the point that the government has presided over the building of 506,000 new homes (p36), which sounds impressive until you discover that the comparable figure for the previous government was 981,000 (Source – DCLG) – and remember that their tenure included the first two years of recession.
Whilst the attraction of pre-election tax cuts is easy to understand, the statement lacked the ambition to really begin to come to terms with what is needed to ensure that UK citizens are decently housed. Here are three points where chancellor George Osborne missed the opportunity to take on the challenge:
(Budget statement p70) “The government is making the first £100 million available to fund infrastructure and land remediation at Ebbsfleet, taking forward its commitment to build the first new garden city for almost 100 years, which will deliver up to 15,000 new homes.”
The idea of investing in new garden cities is a welcome one, but what is missing at the moment is a sense that such a project should be used as a path-finder for recusing the environmental impact of new housing, or that it should make a commitment to provide employment with decent terms and conditions, a good number of apprentices and so on.
(Budget statement p41) “The government recognises the role that underused public land can play in delivering new homes. The government has increased its ambition for public sector land and will release land with capacity for up to 150,000 homes between 2015 and 2020.”
The trouble is that the private sector has well and truly failed to deliver the new homes needed. The government will need to work with local authorities to invest in direct provision of housing, and particularly social housing, especially where the lack of decent and affordable homes is worst. A surge in house building would boost the economy and reduce the ill-health, unhappiness and economic burdens of homes that are unfit for habitation, but it would be foolish that these outcomes can be achieved just by giving land to builders at reduced prices.
(Budget statement p71) Some councillors are undertaking “a review to consider the role local authorities can play in supporting overall housing supply… . The government welcomes the emerging recommendations on the importance of local authorities as Housing Delivery Enablers and greater transparency over local authority housing land.”
This would be quite laudable, except that it is to be done “within existing financial plans”. In other words, strapped-for-cash councils who have had their funding cut by government and their revenue-raising powers severely constrained are being invited to find a way to squeeze out a few more new homes. This is simply not enough.
The chancellor gets some marks for the limited commitments made on housing, but the overall impact is a long way short of what is needed for the next five years. Unfortunately, whilst stamp duty cuts may initially be seen as attractive, they also seem to fit in with the rather tired historic pattern of pre-election sweeteners, rather than being part of a balanced attempt to revitalise the provision of decent homes.