Housing crisis cannot be fixed without new tax policy

Summarised from 3 outlets · Updated 2 Nov, 03:14 · Archive

Britain's housing crisis cannot be resolved without fundamental changes to how property is taxed, according to analysis of the government's first budget.

John Healey's first budget as Chancellor drew criticism from both left and right for failing to address Britain's chronic housing crisis. While housing took up a considerable part of his speech, the measures announced were described as inadequate by analysts including the Resolution Foundation, which called it a 'scatter-gun budget' focused more on politics than economics.

The Guardian reports that Britain's housing situation is critical. Property prices remain at levels that deny younger generations the chance to find a home at a reasonable price, and more than 80% of global investment is in property, the vast majority in residential. Countries from France and Germany to China and Japan have experienced the consequences of treating property primarily as a store of wealth.

Fundamental policy changes are needed to stop property being treated as an investment vehicle and to allow people to move home cheaply, according to analysis of the budget. Without reforms to the tax landscape, the housing crisis will persist regardless of other policy measures.

Meanwhile, Conservative leader Kemi Badenoch accused Healey of leaving the UK with a £49bn black hole in public finances. She claimed Labour would need to raise taxes by £1,700 per household annually by 2030/31 to pay for unfunded spending promises, particularly citing a £11bn defence spending shortfall. Badenoch also pointed to the government's pledge to create a National Care Service, which economists anticipate could cost up to £18bn annually, suggesting these costs are not fully accounted for in the budget.

How it is being reported

• ROBERT HARDMAN: Kemi is more in tune with Commonwealth thinking than our eager-to-please PMSo where will the Chancellor, John Healey, find the extra trillions to pay the penalty now demanded of the British taxpayer - by a Labour Prime Minister, no less?Daily Mail · 2 Nov, 02:57
• Healey has left £49bn blackhole in Britain’s finances, claims BadenochJohn Healey has left the UK with a £49bn black hole that will require substantial tax increases, Kemi Badenoch has claimed. The Conservative party leader said Labour would have to raise taxes by £,1,700 per household annually by the 2030/31 financial year to pay for unfunded spending promises. In particular, Badenoch accused the Chancellor of [...]City AM · 1 Nov, 11:40
• Britain’s housing crisis won’t be fixed without a new tax landscapeWe need policies that stop treating property as a store of wealth and that allow people to move home cheaply John Healey’s critics on the right and left accused him of dodging the big questions in his first budget . The chancellor failed to announce reforms that might tackle some of Britain’s chronic problems, they say. Healey’s scatter-gun budget, as the Resolution Foundation called it, was more about politics than economics, and unapologetically so. Continue reading...The Guardian · 31 Oct, 16:00

In this story: John Healey · Kemi Badenoch · Resolution Foundation · Britain · UK

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