Yorkshire Post - Property
Joseph Rowntree Foundation calls for action on housing
A new report from the Joseph Rowntree Foundation calls for action to make the housing market more inclusive.
It says that the market is facing a “worst of all worlds” situation as rising interest rates and high inflation create the conditions for a housing market freeze unless the Government acts quickly.
The report by Rose Grayston, Toby Lloyd and Neal Hudson for the JRF urges the Government to act to get the market moving while solving the issues that are excluding younger generations from owning their own home or finding genuinely affordable homes to rent.
The authors argue that we can emerge from the change in market conditions with a fairer, more accessible and more sustainable housing system.
They believe that the implications of the current market lull could include a collapse in housebuilding as developers mothball sites to avoid selling in a falling market, transactions falling as homeowners avoid selling while waiting for prices to rise and cashrich investors buying up homes for holiday lets or short-term lets, while first-time buyers who are relying on mortgage finance are frozen out.
They say that vulnerable groups struggling with increased housing costs include private renters, lowincome mortgage holders, those in shared ownership homes and others who recently bought through Help to Buy.
The report sets out a plan of action to address the impact of a downturn while creating a fairer and more economically productive housing system in the long term.
It says that the Government should include the following simple measures in the Budget on March 15:
Keep housebuilding going by funding councils, housing associations, charities and community groups to acquire stalled sites from developers and redesign schemes to include more affordable housing, which can be built quickly.
Increase the Stamp Duty Land Tax surcharge on investor purchases to give an advantage to those seeking to buy a home to live in. Remove tax breaks on shortterm lets, which give landlords a £7,500 tax-free allowance on rents, to discourage landlords from switching from long-term letting to other types of rentals.
Levy council tax on homes in new developments 18 months after planning permission has been granted whether built or not.
Support households struggling with higher costs by unfreezing Local Housing Allowance so it meets the cost of local rents and establishing a new version of the Mortgage
Rescue Scheme used in the wake of the global financial crisis in 2008.
This would fund social landlords to buy the homes of mortgaged homeowners in distress.
The Government should also consider replacing council tax and Stamp Duty with an annual property tax paid by the homeowner rather than the resident.
Diversify the development sector and launch a new programme of development corporations to build high-quality, mixed-tenure developments.
Allow councils to apply for Housing Pressure Zones where they set the rules about who can buy properties to restrict investor activity in areas with high demand for second homes or where low demand is fuelling exploitative lets.