Fury at warning on second home ownership

A LEFT-wing think tank faced fierce criticism yesterday for a report suggesting second home ownership is penalising the young.

A report by the Resolution Foundation – which is run by a former adviser to Ed Miliband – said the buy-to-let boom was reducing the number of homes available for young people to buy.

It said that while the number of Britons with second homes had soared to 5.5million, with their extra homes worth £1trillion, young people were struggling to get on the housing ladder.

But yesterday critics pointed out that the rise in second home ownership had been driven in part by Labour’s decision to raid pensions in 1997. When he was chancellor, Gordon Brown abolished the tax relief pension funds earned on dividends from stock market investment.

The decision has been blamed for ending final salary pension schemes, which in turn has forced many middle class people to look elsewhere to protect their incomes in retirement.

John O’Connell, of the TaxPayers’ Alliance, said: ‘There is nothing wrong with people owning assets to ensure their financial well-being. Who can blame them for doing so? Especially after Gordon Brown taxed them for being responsible and raided their pensions. Ultimately we need to build more houses, not punish people for doing the right thing and preparing for their future.’

The Resolution Foundation was established in 2005, and its present director is Torsten Bell, a former senior adviser to Ed Miliband.

The foundation’s report found the number of Britons who own a second home, buy-to-let or overseas property has doubled since 2001. While the number of millennials who own a home continues to fall, one in ten people now own an additional property. Just 37 per cent of people born in the 1980s managed to buy a home at the age of 29, compared with half of those born in the 1960s.

Wealth from owning a second home has risen since 2001 to almost £1trillion.

‘The sheer scale of additional property wealth is an important driver of rising wealth gaps,’ said George Bangham, policy analyst at the foundation. ‘While young people in particular are less likely to own their own home than previous generations, those that do own are more likely to have more than one property.’