What David Cameron’s tax returns say about property

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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Estate regeneration: trust and money

Originally published on January 11 on Inside Edge 2, my blog for Inside Housing

It will take huge amounts of commitment, trust and money to deliver David Cameron’s vision of estate regeneration.

There is commitment but sadly only to the most simplistic of world views: lots of poor people live on council estates; therefore council estates must cause poverty. Never mind that much better funded area-based initiatives under Tony Blair largely failed. Never mind that poverty and even worse deprivation were concentrated in many of the same areas before the estates were built (just check the Booth poverty maps of London). The ‘so-called sink estates’ will be radically transformed or knocked down.

Trust is in such short supply after a series of controversial regenerations of estates in London (and we are mainly talking about London) that promises need to come from the very top to restore good faith. That applies both to the prime minister and to the Conservative candidate for London mayor Zac Goldsmith.

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Under new ownership

Originally posted on October 7 on Inside Edge 2, my blog for Inside Housing

Forget social housing, any kind of affordable rented housing is living on borrowed time in the wake of this year’s Conservative conference.

In his speech on Wednesday David Cameron announced ‘a national crusade to get homes built’ and go from ‘Generation Rent into Generation Buy’.

The headline policy of starter homes does not look any better than it did the first two times he announced it (in December 2014 and again when he doubled the target in March). The original policy had potential because it offered the prospect of additional homes on sites that would not have got planning permission before. Though there were potential problems, what would amount to urban exception sites looked like a good idea, especially if the uplift in land values could be captured to pay for infrastructure.

But the idea has looked worse and worse the more it has evolved. Research by Shelter has shown that even at a 20 per cent discount the homes will not be affordable in most of the country. Despite an advisory committee on design, there’s not much to stop housebuilders cutting costs by making them starter hutches rather than homes and no mechanism has been suggested so far to check that the discount really is a discount. And even if there is a deal to be had for Generation Rent some of the benefits will go to people who could have afforded to buy at the undiscounted price.

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The 101st day

The Conservatives must be pinching themselves after 100 days in government. What can possibly go wrong?

For three months they’ve been able to do pretty much as they like. The Liberal Democrats are humiliated, Labour is demoralised and distracted and the opposition that has come from the SNP is a comforting reminder of the Scottish card that won the election. Thanks to all of that, plus expectations formed by inaccurate opinion polls, a government with a tiny majority elected with just over a third of the vote can behave as though it’s won a victory on a par with 1945, 1979 and 1997.

Yet the Tory luck cannot hold for ever. The obvious cloud on the horizon is Europe, with no sign that Brussels will hand David Cameron concessions meaningful enough to sell to his sceptical party ahead of the election. Economically, it’s far easier to start with a recession turn it into a recovery than it is to manage expectations in improving times.

But could the Conservatives turn out to be most immediately vulnerable where they seem strongest: on the ground they’ve staked out since the election to be ‘the real party of working people’? As Cameron put it in an article for the Telegraph on Saturday:

‘On the challenge of delivering an economy that supports working people, it is Conservatives who believe that a free enterprise economy is an ally not an enemy in generating wealth and extending opportunity. By cutting taxes, reforming welfare and increasing minimum wages we are showing we are the real party of working people.’

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If at first you don’t succeed

Originally posted on July 13 on Inside Edge 2, my blog for Inside Housing

It may have important new provisions on housing and planning but the name of the government’s new productivity strategy rather gives the game away.

Described as ‘the second half of the Budget’, Fixing the Foundations was published by the Department for Business Innovation and Skills but includes chapters on housing and planning and welfare that amplify decisions taken in the first half.

But does the name remind you of anything? Go back four years and David Cameron himself was launching a ‘radical and unashamedly ambitious’ housing strategy. The title? Laying the Foundations.

Once they’ve stopped sucking air through their teeth, any builder will tell you that once you’ve laid the foundations and built on top of them, it’s enormously expensive to start to fix them. It’s also a pretty good indication that the foundations were pretty rocky to begin with.

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Enemies of the state

Originally posted on July 5 on Inside Edge 2, my blog for Inside Housing

Bring it on. We are determined take you on. Who do David Cameron and George Osborne have in mind?

If you haven’t seen it yet, you need to read their op-ed in Saturday’s Times on ‘Here’s how to build a homeowning Britain’. They mean England of course. You can read extracts on the Number 10 website but that only gives a flavour of the full article so I’ve posted it here.

Ahead of the Budget, they promise that ‘a shake-up of inheritance tax and crackdown on nimby councils will give young people a foothold on the property ladder’. It is not just an explicitly, distinctively Conservative vision for housing but also a declaration of war against anyone opposed to that vision. Here’s my take on the key points:

‘Having your own place is an important stake in our economy. It’s also one of the best expressions of the aspirational country we want to build, where hard work is rewarded.

‘It’s also about social justice. We don’t want this to be a country where if you’re rich you can buy a home, but if you’re less well off you can’t. We want it to be One Nation, where whoever you are, you can get on in life.’

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‘Here’s how to build a home owning Britain’

Here is the full text of the belligerent op-ed on housing by David Cameron and George Osborne in Saturday’s Times. My post on the implications is here.

Here’s how to build a home owning Britain

David Cameron and George Osborne

A shake-up of inheritance tax and crackdown on nimby councils will give young people a foothold on the property ladder

At a time of uncertainty abroad, here at home we will be delivering a budget next week with economic stability at its heart, offering security for working people.

Encouraging home ownership is central to that. Having your own place is an important stake in our economy. It’s also one of the best expressions of the aspirational country we want to build, where hard work is rewarded.

It’s also about social justice. We don’t want this to be a country where if you’re rich you can buy a home, but if you’re less well off you can’t. We want it to be One Nation, where whoever you are, you can get on in life.
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