Tory MP Calls for Clamping Down on Buy-to-Let
A new Conservative think tank, Onward, has published a report calling for widespread reform of the UK’s housing market.
The report raises many issues to do with home ownership in the UK and points the finger at the buy-to-let market before calling for a reform of the systemgeneral reform.
Neil O’Brien, who was formerly an advisor to first George Osborne and then Theresa May, and is currently the MP for Harborough, authored the report. He said: “We should protect existing landlords but discourage more people from investing in rental property, because the buy-to-let boom has bid up prices and reduced home ownership among younger people.”
He went on to say that an extra 2.2 million families would own their own homes had it not been for the buy-to-let boom, coupled with a decline in new house building in the UK. In fact, the data from Onward shows that since 1970, Britain has only built half the number of new houses as some countries in mainland Europe, such as France. France has built 7.8 million more houses than the UK has in that time frame, and as a result house prices, and the cost of renting, areis much lower.
The cost of renting in the UK has risen rapidly over the past few decades. Back in the 1960s, those who rented spent 10% on average of their household income on rent, or 15% for those who lived in London. Today, those figures have almost tripled, to 30% and 40% respectively.
Based on the data, Onward has called for sweeping changes to the system. Will Tanner, formerly Theresa May’s former deputy head of policy, who now heads the thinktank said that “if the government wants to regain the support of young people and win the next election, it must be unflinching in its pursuit of greater home ownership. That means hard choices, like ending tax breaks for new landlords and giving councils much stronger powers to assemble land for new towns and villages.”
These tax changes suggested by the report would mean that Landlords would no longer receive mortgage relief or capital gains tax discounts when buying future properties.
Onward say that to further shake things up, councils should be able to up buy undeveloped land at the market price. This is instead of needing to pay an inflated rate for land that has had planning permission factored into its price. The report suggested as an example that the cost of obtaining planning permission for a hectare of land could add up to £2.5m to its price.
Mr O’Brien went on to argue that this system favours landowners and developers at the expense of local communities, and families who cannot afford to buy their own homes. Across the country, he says that the artificial inflation of the value of land due to planning permissions is £9bn.
Finally, the report calls for the government to simply build more houses. Theresa May’s current target is to have built 300,000 new homes in England by 2025. This is an increase on the total of 217,000 promised before the last general election. However, the costs of rent and buying new homes has become such a political issue that Onward have urged Mrs May to take even more action, in order not to lose ground on the matter at the next election.