What David Cameron’s tax returns say about property
Posted: April 10, 2016 Filed under: Housing market, London, Pay to stay, Private renting, Tax | Tags: David Cameron, Panama Papers 3 CommentsNext 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:
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.
The turn of the screw
Posted: April 4, 2016 Filed under: Bedroom tax, Benefit cap, Housing benefit, Private renting, Supported housing, Tax credits, Universal credit | Tags: UK Housing Review Leave a commentOriginally posted on April 4 on Inside Edge 2, my blog for Inside Housing
You’d never guess it from the sound of the violins playing for Buy to Let but there were other significant changes to benefits and tax on housing this month.
As ‘investors’ rushed to beat the April 1 deadline for higher rates of stamp duty on second homes, the orchestra reached a crescendo after new affordability tests were proposed by the Bank of England.
All that noise meant much less was heard about their tenants facing up to the first year of an unprecedented four-year freeze in their local housing allowance and other benefits and tax credits.
After three years in which LHA increases were restricted to 1 per cent, housing benefit rates for private tenants will now stay the same until 2020. Whatever the problems faced by their landlords, that means tenants will inevitably see rising shortfalls between their benefit and their rent. Equally inevitably, you would think, evictions will rise.
Book review: The Rent Trap
Posted: March 27, 2016 Filed under: Buy to let, Private renting, Regulation, Tenants Leave a commentHow did we end up with a housing system dependent on at least 1.5 million small-scale private landlords offering millions of tenants little or no security and costing billions in housing benefit?
You couldn’t do much better if you set out to design the worst possible way of housing the nation in general and young people in particular. But the changes that now seem set in stone – a private rented sector that’s grown so fast it is now bigger than the social sector and home ownership shrinking back to the levels last seen in the 1980s – have happened in the space of one generation.
The Rent Trap, a new book by Samir Jeraj and Rosie Walker, is the best attempt I’ve yet read to explain how and why this has happened to a general audience. The subtitle – How We Fell Into It And How We Get Out Of It – reflects an even more ambitious aim.
Farewell to the Great Social Reformer
Posted: March 20, 2016 Filed under: Universal credit, Welfare reform | Tags: Conservatives, Iain Duncan Smith 2 CommentsYou go away for the weekend and suddenly everything goes mad: it turns out that Iain Duncan Smith was really a Socialist or a Liberal Democrat all along.
The Great Social Reformer (this is what the many ‘friends of’ IDS speaking to journalists call him) has not just resigned, not just skewered George Osborne, he’s also questioned the fundamentals of the post-2010 Conservatives narrative. We are not ‘all in this together’, the most vulnerable will not be ‘protected’ and the deficit reduction target is ‘more and more perceived as distinctly political rather than in the national economic interest’.
Yet this (apparent) modern day heir to Tory Great Social Reformers like Shaftesbury and Wilberforce is also the same Iain Duncan Smith responsible for punitive benefit sanctions, the bedroom tax, the £30 a week ESA cut and all the other salami slices taken out of the social security system in the last six years that were not ‘compromises too far’. The man who took the moral high ground about cuts that benefit the better-off is the same one who stood on a manifesto of cutting inheritance tax and £12 billion from benefits.
Filling in the blanks in the Housing Bill
Posted: March 10, 2016 Filed under: Council housing, Pay to stay, Right to buy, Social housing | Tags: Housing and Planning Bill, National Audit Office 1 CommentOriginally posted on March 10 on Inside Edge 2, my blog for Inside Housing
Key elements of the Housing and Planning Bill have faced serious scrutiny in the last couple of days but we’re still not much nearer to knowing how or if they will work.
The frustration of MPs and peers is palpable as they repeatedly ask for more detail and are just as repeatedly told that it will be available shortly. It was all too much even for a Conservative MP on the Public Accounts Committee (PAC) on Wednesday afternoon. ‘You’re treating the parliamentarians around this table with contempt,’ Stephen Phillips told two senior Department for Communities and Local Government (DCLG) civil servants. ‘You’re asking us to take this on faith. Why not do the work first and then bring the legislation forward?’
The answer is of course that it’s much easier for ministers if it works the other way around. Under current plans, the crucial detail will appear in secondary legislation only after the bill has Royal Assent.
The PAC was investigating the value-for-money aspects of the extension of the Right to Buy to housing associations and the levy on forced sales of council houses that is meant to fund it. But members didn’t get far asking for detail. ‘The timings have yet to be determined,’ ran one senior civil servant answer. ‘The amounts have yet to be determined. The formulae have yet to be determined.’
The National Audit Office (NAO) is not impressed either. Here’s its assessment of the government’s impact assessment of the bill:
United nation
Posted: March 7, 2016 Filed under: Affordable housing, Scotland, Wales Leave a commentOriginally posted on March 7 on Inside Edge 2, my blog for Inside Housing
Campaigners gather in the capital city for a pre-election rally to call for decisive action on the housing crisis. Sound familiar?
But this is not Homes for Britain or London and it’s no longer March 2015. Instead this happened on Friday in Cardiff and it’s Homes for Wales.
The campaigns are clearly related – both are aimed at all the political parties, both are supported by a coalition of housing associations and other housing organisations – but there are differences too.
The Homes for Britain rally happened in a big hall with speakers from the housing world and beyond and from all the main political parties. For all the energy and enthusiasm of the day, it left itself open to the accusation that this was just another example of the sector gathering to congratulate itself about how wonderful it is.
In contrast, campaigners for Homes for Wales gathered on the steps of the Senedd Building in Cardiff Bay for speeches before marching through the streets of the capital for a rally in the heart of the pedestrianised city centre. For a couple of hours, shoppers could watch video messages from the political parties, Welsh celebrities such as Michael Sheen and people with personal experience of the housing crisis. Up to 700 people took part and it was the first housing march that anyone could remember in Wales. For more about the campaign see this piece by Kevin Howell.
Mind the gaps in the Housing Bill
Posted: March 1, 2016 Filed under: Affordable housing, Council housing, Pay to stay, Right to buy, Starter homes, Tenants | Tags: Housing and Planning Bill Leave a commentOriginally published on March 1 on Inside Edge 2, my blog for Inside Housing
For a piece of legislation that’s already faced hours of scrutiny from MPs and peers, there are still gaping holes at the heart of a Housing and Planning Bill that started life on the back of a fag packet and hasn’t moved much beyond it in several important respects.
Opposition demands for more detail about legislation are nothing new of course, but I’ve argued before that the lack of clarity here is deliberate in a bill that is designed to allow the government to do what it wants in future. To take one example, after stretching the definition of ‘affordable’ to breaking point to include £450,000 Starter Homes, the bill adds that the secretary of state ‘may by regulations amend this section so as to modify the definition of affordable housing’.
Many of the gaps were highlighted in the Commons late last year. The last two months have brought little further detail but now it’s crunch time: as peers debate a series of amendments, ministers are bound to come under increased pressures to say exactly what they mean.
