More affordable housing doesn't translate to lower property taxes

July 11, 2007 8:56 PM

Gordon Brown has announced that housing, and providing housing for first time buyers in particular, will be the main priority of next year’s parliamentary agenda. He claims that "[p] utting affordable housing within the reach not just of the few but the many is vital both to meeting individual aspirations and a better future for our country."


If Brown is really serious about making housing affordable, then he should take a serious look at government policy, especially over home information packs and stamp duty. Home information packs are another example of wasteful, expensive and ultimately deficient red tape imposed by government. They will clearly act as a disincentive for homeowners to put their houses on the market by making them pay for these pointless packs to be produced. Research has suggested that they will deter up to 60% of house owners from putting their houses on the market. Obviously this will depress the supply of houses and so force up house prices. Research by the Oxford Economic Forecasting has predicted that this further red tape will depress housing transactions, stunt labour mobility and threaten economic stability.


A report by Bradford and Bingley showed that stamp duty now affects 97% of first time buyers, with the average first time buyer having to pay £1,500 in stamp duty and buyers in London have to find £2,000 to take their place on the first rung of the property ladder. As David Bitner, head of mortgages at Bradford Bingley, put it: “Stamp duty was never intended to be a tax on first time buyers, but now it affects the vast majority at a time when they need every last penny for a deposit”


Once again, the government proves just how greedy and short-sighted it is: Brown wants to have his cake and eat it – spout rhetoric about affordable housing whilst keeping the revenues of the unfair and hugely damaging stamp duty, talk of environmental protection whilst building new houses over flood plains and green field sites. This is just the kind of hypocrisy we have come to expect from politicians.

Gordon Brown has announced that housing, and providing housing for first time buyers in particular, will be the main priority of next year’s parliamentary agenda. He claims that "[p] utting affordable housing within the reach not just of the few but the many is vital both to meeting individual aspirations and a better future for our country."


If Brown is really serious about making housing affordable, then he should take a serious look at government policy, especially over home information packs and stamp duty. Home information packs are another example of wasteful, expensive and ultimately deficient red tape imposed by government. They will clearly act as a disincentive for homeowners to put their houses on the market by making them pay for these pointless packs to be produced. Research has suggested that they will deter up to 60% of house owners from putting their houses on the market. Obviously this will depress the supply of houses and so force up house prices. Research by the Oxford Economic Forecasting has predicted that this further red tape will depress housing transactions, stunt labour mobility and threaten economic stability.


A report by Bradford and Bingley showed that stamp duty now affects 97% of first time buyers, with the average first time buyer having to pay £1,500 in stamp duty and buyers in London have to find £2,000 to take their place on the first rung of the property ladder. As David Bitner, head of mortgages at Bradford Bingley, put it: “Stamp duty was never intended to be a tax on first time buyers, but now it affects the vast majority at a time when they need every last penny for a deposit”


Once again, the government proves just how greedy and short-sighted it is: Brown wants to have his cake and eat it – spout rhetoric about affordable housing whilst keeping the revenues of the unfair and hugely damaging stamp duty, talk of environmental protection whilst building new houses over flood plains and green field sites. This is just the kind of hypocrisy we have come to expect from politicians.

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