Property news from the 2021 Conservative Party conference

Replacing stamp duty and council tax with a proportional property tax – an idea discussed by Lord Willetts [given the nickname “Two Brains” in the 1990s – Owl].

Brexit may have finally been replaced by net zero and levelling up as the main topic of conversation, but one thing remains constant as the Conservative Party conference reconvened this week — housing is still at the top of the agenda.

Carol Lewis, Emanuele Midolo www.thetimes.co.uk 

Not unsurprisingly for a party with the slogan “build back better”, there was a focus on construction: from the housing secretary Michael Gove’s promises to build on brownfield sites in the Midlands and the north, to the charity Shelter’s banners adorning the buildings outside Manchester’s convention centre telling the prime minister the solution to the housing emergency was to build social housing. With more than 100 mentions of the words “housing” and “homes” the Tories’ agenda was clear.

UK construction statistics published this week showed that building faltered in September amid a lack of materials and staff. However, in a small room high above the trade hall — away from the TV crews, the party faithful and stall holders — delegates at a fringe event, hosted by the think tank Bright Blue and the campaign group Fairer Share, had alighted on a solution.

Lord Willetts, the president of the Resolution Foundation’s advisory council, and Aaron Bell, the MP for Newcastle-under-Lyme, were among those discussing how replacing stamp duty and council tax with a proportional property tax could release up to 600,000 homes into the market over the next five years without the need to lift a single brick. [Source seems to be Fair Share Campaign – Owl]

The tax — an annual charge equivalent to 0.48 per cent of a property’s value, rising to 0.96 per cent for second homes and foreign-owned homes — would release an additional 315,000 properties through extra market activity plus 135,000 second homes and 55,000 empty homes over five years, as well as 90,000 houses to be built on undeveloped plots. Some 255,000 of these would be one and two-bedroom homes suitable for first-time buyers, according to the groups.

Construction was not forgotten though, with the tax forcing an additional 90,000 more homes to be built as developers were spurred into action by the tax instigated at the point of planning permission to combat land banking.

Overall, the tax would mean 76 per cent of homeowners in England would be better off, with any increase compared with council tax capped at £100 per month. But most importantly, explained Andrew Dixon, the founder of Fairer Share, it would free up homes and the movement of people, helping more first-time buyers on to the ladder while encouraging downsizers out of family-sized homes.

Fairer Share’s calculations, based on data from 2020 showing 270,000 long-term empty homes in England, could be an underestimate, however, with the latest official statistics revealing that the number of vacant homes stood at 665,000 in October 2020.

Chris Bailey, the campaigns manager at Action on Empty Homes, says that homes are often inherited by families who don’t have the money, time or energy to renovate them. “Some remain empty for years or even decades, often ending up in a run-down state sold at auction. They are a wasted resource,” he says. “With so much focus on working towards net zero, making best use of our housing stock should be a no-brainer.”

It might be a case of taking back control rather than building back better to solve the housing crisis.

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