Originally published on March 6 on my blog for Inside Housing.
If you are under 22 and you need help with your housing it all depends on who your parents are.
Three measures from George Osborne Budgets apply from next month: the cut in housing support for 18-21 year olds; the Lifetime ISA; and the cut in inheritance tax on main residences.
This time last week hopes were high that the government would row back on the first of these. A government source told The Observer that ministers and civil servants dealing with the cut in housing support ‘hate the policy’. Despite this the regulations implementing it were laid on Friday, a day when parliament was not sitting.
There is no official explanation of the move on the DWP website but a spokesman repeats previous lines about ensuring that 18-21 year olds ‘do not slip straight into a life on benefits’.
If you think the row over business rates is bad, imagine for a moment what would happen if council tax went through a revaluation.
As I’m writing this, some sort of government climbdown seems inevitable after weeks of press coverage of the rates increases faced by shops and other small businesses.
Some of the furore seems justified. The business rates system seems stuck in the past, unable to cope with out-of-town supermarkets let alone internet retailers and almost seems designed to destroy High Street businesses. There are cliff edges built into the system, especially at the bottom end. It’s not clear why farms are exempt but hospitals are not. Exemptions for empty and unused property create incentives to keep it empty.
Much of it is not. The journalists reporting from the mean streets of Maidenhead and Weybridge seem much less inclined to travel to Merthyr or Wakefield to talk to people whose business rates will be cut. The government maintains that this is a revaluation with no net increase in the tax (though some Tory MPs dispute this). That means the benefits will be felt where they should be: in less affluent areas.
Originally posted on August 4 on Inside Edge 2, my blog for Inside Housing
Record low interest rates have been great for people with mortgages but terrible for the housing system as a whole.
Like the Bank of England’s decision in March 2009 to cut the base rate to 0.5%, Thursday’s further reduction to 0.25% is motivated by concern about the economy as a whole. But nobody imagined in 2009 that seven and a half years later interest rates would still be as low, still less even lower.
The result has been severe distortion in the housing market. What was only meant to be a temporary fix has instead become a semi-permanent feature of the system that has benefitted home owners and landlords at the expense of everyone else. The effect of Thursday’s small cut will be limited in itself but it means that effects of the low rate regime will be with us for much longer.
Originally published on July 15 on Inside Edge 2, my blog for Inside Housing
Take your pick: targets for new homes are much too low; the private sector cannot deliver them; and policy is too focussed on home ownership.
A report published on Friday by the all-party economic affairs select committee of the House of Lords does not so much criticise the government’s approach to building more homes as skewer it.
And one of the clearest explanations I’ve yet read of why current policy cannot, and will not, work does not come from just any old committee. The group of Conservative, Labour, Lib Dem and Crossbench peers includes two former chancellors of the exchequer (Lords Lamont and Darling) and two former permanent secretaries of the Treasury (Lord Burns and Lord Turnbull) with more cabinet ministers, senior mandarins, special advisors and business people also in the mix. They are drawing on decades of experience of previous failures in housing policy.
The report is also brilliantly timed, just at the point when Theresa May’s new government is getting down to work and preparing for life after the referendum and George Osborne’s budget surplus targets.