Tory MP says tax breaks for landlords have helped price younger people out of the market and calls for stronger role for councils
Private landlords have put home ownership beyond the reach of at least 2 million families, research shows, while Britain has built only half as many new homes as France over the same period.
The radical report from the new Conservative thinktank Onward recommends ending or severely curtailing tax breaks for buy-to-let and private landlords, a stronger role for local councils and major reform of the planning system to allow communities rather than developers to lead the process.
The report, which was written by Neil O’Brien, a former aide to George Osborne who also worked for Theresa May at No 10, calls for government intervention in the housing market, including giving London councils the power to limit foreign ownership.
“We need to change the balance between the rented sector and home ownership,” O’Brien 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 homeownership among younger people.”
Previous governments have already acted to curb tax relief on mortgage repayments and maintenance for landlords, but the thinktank says it is still a privileged form of investment that reduces the number of homes available for owner-occupiers while reducing the amount of capital available for more productive investment.
“The UK is one of the cheapest countries for investors involved in residential rental investments,” the report finds.
Emphasising the link between shortage of supply and rising home prices, the report offers radical ideas for increasing the number of new homes.
It argues that planning permission for a hectare of agricultural land can add as much as £2.5m to its value. If the community could benefit from some of the increase, the report argues, it could be used to pay for the kind of services and infrastructure that new developments sometimes lack.
Instead of piecemeal development, it recommends that councils should have the power to put together land and create new settlements with services. It looks across Europe, where most local authorities have strong powers to initiate and shape development and link it to public transport.
It proposes better support to help councils plan new developments drawing on expertise from across the sector, as well as abroad. It also recommends much higher density urban occupation, where the UK lags behind most other comparable countries.
Source: The Guardian