Hoping to start a family in your own home? Whether private rent, social housing or owner-occupied, most people hope to have a home which is warm, affordable to heat and pay for and gives them space for family life.
If you are a couple on a combined salary of £40,000 you will be saving up long after you wanted to start a family before you can afford the deposit on even a very modest house in Bristol. If you can turn to relatives to help you, that might speed things up, but lots of parents I talk to each week tell me they are struggling themselves with stagnant incomes, elderly relatives needing care and savings earning next to nothing in interest, if they still have any.
With worries about the value of their future pension as well, many of the managers at the bank of mum and dad just can’t help their adult sons and daughters, no matter how much they want to.
What about renting? Well, lots of young people I talk to would like to rent, particularly at the time of their lives when they don’t want to get stuck with a long-term commitment. But also some people simply prefer to rent – there are all sorts of benefits. However, today’s private rental rates are often much higher than the equivalent in mortgage, and social housing is hard to come by. Plus in private rent there is often a swingeing agency fee to pay, or an insecure lease.
So what did our chancellor offer to struggling young people and their parents last week, wanting to know where the homes of the future will come from and how they can get on any sort of housing ladder, owned or rented? A shared mortgage scheme? Stronger regulation of the private rented market? A programme of building homes? Sadly not.
Stamp Duty changes
George Osborne announced major changes to stamp duty, the charge a person has to pay when they buy a home. It’s changing to percentages which will vary between bands, like income tax, rather than charging single rates on the property value as a whole. This means that no-one pays anything on the first £125,000, just as everyone has a tax-free allowance on their income tax. Then the next £125,000 is charged at two per cent, up to £250,000. On the part between £250,000 and £500,000 it’s five per cent. By the time you are paying more than £1.5million you’ll be paying 12 per cent.
Previously, the highest rate was seven per cent and only over £2m. Because of how the arithmetic works, people buying houses worth more than £1m will be paying more than they would have before, and those buying homes worth less than £1m will mostly be paying less.
I believe we should spread the strain of economic recovery as fairly as possible and that should mean that those with the most should have to stump up a bit more. Labour will support this measure because it recognises the need to charge more for higher value property – but this doesn’t help people find a home they can afford. It ignores completely that if you are on a stagnant income, with rising costs and high rent, the chances are high you can’t even get close to paying the deposit on a home, or the rent of somewhere decent, and that we have a chronic shortage of homes to buy or rent anyway.
It looks to me like people up and down the age scale are left with virtually nothing to help them with the cost of housing, food and fuel this winter. Osborne has accepted the principle of Labour’s argument that very high value properties are under taxed. Unfortunately, too many people in Bristol West will be left still struggling to find anywhere affordable to live.
Someone near you in Bristol right now is struggling to heat a poorly insulated home and they can’t ask their landlord to do anything about it for fear of extra charges or the threat of early end to the lease. Someone near you in Bristol right now has an adult child and their partner, possibly also children living with them, way past the point where the home can accommodate that many people comfortably. Someone near you in Bristol right now is worrying about how they are going to pay the rent.
A rise in stamp duty is worth supporting, but it won’t help any of these people. Labour’s plans, to build 200,000 homes each year, to regulate private rents and fuel prices and to scrap letting agencies’ fees to tenants would all help. It’s a disgrace that there is anyone living in one of the wealthiest countries in the world who doesn’t have somewhere affordable, decent and warm to live. It’s all fixable and it needs fixing now.
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