Owning the future

Posted: June 30, 2016 | Author: | Filed under: Help to Buy, Home ownership, Shared ownership, Social housing, Starter homes, Tax | Tags: | Leave a comment

Originally published on June 30 on Inside Edge 2, my blog for Inside Housing

The shift in subsidy from renting to owning under this government may be obvious but it’s only when you see it laid out in total that you appreciate its scale.

This year’s UK Housing Review Briefing, published at the CIH conference on Thursday, sets out total government support for different kinds of housing from 2015/16 onwards. The total for social and affordable rent is just over £2 bn. The total for home ownership and the private market is a cool 21 times bigger than that: £42.7 bn.

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What David Cameron’s tax returns say about property

Posted: April 10, 2016 | Author: | Filed under: Housing market, London, Pay to stay, Private renting, Tax | Tags: , | 3 Comments

Next time you read about ‘fat cats’ earning more than the prime minister here’s something to bear in mind: so does his house.

The summarised tax returns released by David Cameron this weekend show that he had a total taxable income of just over £200,000 in 2014/15. The first £141,000 of that were his earnings as prime minister: he has not taken a pay rise since 2010 and has also voluntarily waived a £20,000 prime ministerial expenses deduction since 2011.

Most of the Panama Papers coverage has concentrated on Cameron’s links to his father’s offshore fund and an inheritance gift from his mother. However, he is also the first prime minister to rent out his existing home while living tax-free in Downing Street. The accounts show that he had a net rental income of £47,000 from letting out his house in Notting Hill, an amount that notes to the accounts confirm is his 50 per cent share of the proceeds:

Tax

So the total rent (after expenses) received by the Camerons last year was £94,000 and in the first five years since he became prime minister they gained a total of £432,000 in rent.

However, that is not the total amount they will have ‘earned’ from their house as London house prices have also soared over the same period. The exact value of the Cameron house is hard to pin down, since they are reported to have spent £600,000 on renovations after buying it in 2006. Some reports put the value at £2 million in 2010, others £2.7 million.

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Monopoly money: London Help to Buy

Posted: February 4, 2016 | Author: | Filed under: Help to Buy, Land, London, Tax | Leave a comment

Originally posted on February 4 on Inside Edge 2, my blog for Inside Housing

The person who sprang instantly to mind when I saw the promotional material for London Help to Buy on Twitter this week was Lizzie Magie (of whom more later).

The scheme offering 40% equity loans to buyers of new build property in London costing up to £600,000 was first announced in the Spending Review and formally launched this week. Here (thanks to Joe Sarling for drawing my attention to it) is the advert designed for digital media:

The Angel, Islington, costs a little bit more than £100 these days and with studio apartments in one new development starting at £715,000 you can forget about building a house for £50 or renting one for £6. But you get the general idea: it seems that you can now get on the property ladder as easily as you can ‘Advance to Mayfair’ or ‘Go Back to Old Kent Road’.

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Have the Tories lost the plot?

Posted: April 12, 2015 | Author: | Filed under: Housing market, Right to buy, Tax | Tags: , | 1 Comment

When exactly are the Conservatives playing at with their election campaign? A relentlessly disciplined and on message electoral machine has instead looked erratic and directionless. Personal attacks on Ed Miliband have transformed him from a weird nerd into a ruthless dude. Even the right-wing press that is meant to sing to the Tory tune sounds like it has forgotten the words.

I could be completely wrong about all of this of course. There are still 25 days to go till polling day: the UKIP vote could collapse in enough seats the see the Tories home: we could end up being brainwashed rather than bored by the endless repetition of ‘long-term economic plan’ and ‘hardworking families’; Lynton Crosby is a genius, the cross-over will come and the polls could be as wrong as they were in 1992.

For the moment though things seem to keep going wrong for the party that ruled Britain for most of the 20th century but hasn’t won a majority for 23 years. Just as at the last election, the Conservatives seem unable to win more than a third of the vote. For me, this is about more than just UKIP splitting the vote. A bit like with Labour in the 1980s, I’m not clear what the Tories stand for any more.

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Sign of four

Posted: March 10, 2015 | Author: | Filed under: Help to Buy, Housing market, Social housing, Tax, Universal credit | Leave a comment

It’s time once again for a comprehensive overview of the state of the housing nation. Here are four key points I drew from this year’s UK Housing Review.

The headlines so far have been made by falls in home ownership for young people, but the 2015 Review also highlights these other key points for housing across all tenures:

1) Universal dependency

This isn’t the first time the Review has made this point but it is the first time I’ve seen it summed up so clearly in one graph.

All the rhetoric about universal credit says that it will reward those ‘hardworking families’ and help to end the ‘dependency culture’ of the benefits system. The new scheme does improve the poverty trap caused by the rate at which housing benefit is withdrawn as your earnings rise. A failure to include council tax benefit plus cuts in recent Budgets and Autumn Statement detract from this objective but it does still seem better designed to ‘make work pay’.

However, there is a price to be paid for this improvement.

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Property and the political elite

Posted: November 24, 2014 | Author: | Filed under: Equality, Housing market, Mansion tax, Tax | Tags: | 7 Comments

It’s now received wisdom, and a key part of UKIP’s appeal, that we are ruled by politicians who are out of touch with the concerns of ordinary people. How much of this is down to house prices?

Perceived divisions between politicians and voters are nothing new of course. Nor are accusations of champagne (or Islington/Hampstead) socialism and a huge gap between Labour leaders and their core vote. However, if these are US-style ‘culture wars’ over the politics of identity and national flags, they are being fought in the language of house prices, as shown only too clearly in this week’s Mail on Sunday story about the ‘Thornberry set’ and the North London ‘liberal elite’.

The issue was highlighted by last week’s tweet by Labour MP Emily Thornberry about a flag-festooned house in Rochester & Strood and then brought home by media coverage of its Sun-sponsored owner knocking on the door of her ‘£2 million house’ in Richmond Crescent in Islington. This street is iconic in New Labour circles because it’s where Tony and Cherie Blair lived immediately before they won the 1997 election. Former Islington council leader turned Labour MP and chair of the Public Accounts Committee Margaret Hodge still lives there. This is a street of seriously big North London houses but they weren’t always worth in the millions.

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Housing: where’s the plan?

Posted: November 5, 2014 | Author: | Filed under: Economics, Housebuilding, Planning, Tax | Tags: | Leave a comment

A new book by the economist whose work first established the 250,000 homes a year benchmark has to be worth reading – especially when she’s not convinced it’s possible anymore.

Kate Barker’s seminal report on housing for the Blair government nailed the idea that the UK and especially England need to build houses at a much faster rate. A decade, and a separate study of planning, later and it still the ultimate source for targets of 200,000, 250,000 and even 300,000 homes a year to cope with demand and make up for the shortfall.

Now she’s back with Housing: Where’s the Plan, a short book setting out the housing challenge and potential solutions to it. With the new homes deficit rising by the year, she starts with a sober assessment of the possibilities:

‘To create a fairer and less harmful housing market, a combination of strong central direction about housing supply and unpopular taxation changes would be required. But politicians find it hard to grasp these nettles: there is far too much short-term pain and the gain will go to their successors. It is easier for them to carry on with somewhat ineffective knee-jerk and populist help for first-time buyers.’

While a perfect market may not be possible the book suggests ‘criteria for what a better housing market might look like’. However, she injects a note of caution from the outset:

‘I have become less convinced that it will be possible to meet demand in much of southern England, given the strength of local opposition in many places. So building more housing will not be the only answer, we also need to ameliorate the consequences of demand continuing to exceed the available supply.’

In less than 100 pages, the book covers an immense amount of ground including the sort of outcomes we want, post-war housing and planning policy, the housing market and the wider economy, market risks and taxation. Read the rest of this entry »

Taxing problems

Posted: October 14, 2014 | Author: | Filed under: Housing market, Tax | 1 Comment

Could we invent a worse system of taxing housing than the one we have now?

As modest attempts at reform are made to howls of protest from those who stand to lose out, it’s worth standing back a moment to reflect on what we tax (and why) and what we don’t.

We have an annual tax on the value of all homes but the council tax in England and Scotland is based on property values as they were in 1991 with a top band of just £320,000. The owner or tenant of a modest semi in Wolverhampton can end up paying more than an oligarch with a multi-million pound home in Westminster. The system was designed to narrow the differences between the top and the bottom from the start but failure to uprate it in line with house prices has amplified the distortions.

-> Read the rest of this post on Inside Edge, my blog for Inside Housing

 

Unequal shares: All that is Solid

Posted: February 25, 2014 | Author: | Filed under: Equality, Housing market, Tax | Tags: , | Leave a comment

What if our real housing problem is not a lack of a new homes but the distribution of the ones we already have?

That’s the key premise of All that is Solid: the Great Housing Disaster, an intriguing new book published this week by Danny Dorling, professor of human geography at Oxford University. In it he attacks not just the ‘yes to homes’ consensus about the solution to the housing crisis but the actions of just about all the key people involved. Politicians, housebuilders, landlords and property journalists are all seen as part of the problem but housing associations, the CIH and the voluntary sector also come under fire for accepting the status quo.

Read the rest of this post on Inside Edge, my blog for Inside Housing

Export market

Posted: September 21, 2013 | Author: | Filed under: Affordable housing, Housebuilding, Housing market, Tax | Leave a comment

What price homes for Londoners when new developments are marketed first to overseas investors with a promise that there will be ‘no social housing’?

As The Standard reported yesterday, the ‘fully private’ flats at Capital Towers near the Olympic Park go on sale in Malaysia this weekend in what it dubs a ‘no riff raff row’.

That example comes from a report out today by Darren Johnson, a Green Party London Assembly member, who claims that a third of all buyers of new homes are from overseas and that two-thirds go to investors rather than occupiers.

He accuses mayor Boris Johnson of actively encouraging a process that leads to increasing concentration of housing wealth, a severe social housing shortage and the unnecessary demolition of existing stock and a lifetime of insecure renting for most Londoners.

Read the rest of this post on Inside Edge, my blog for Inside Housing

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