The latest Resolution Foundation Home Improvements report came out yesterday and proposed a number of new policies to address the “decades of neglect” that have left young people a short changed when it comes to housing.
According to the report, 40% of millennials live in privately rented accommodation at the age of 30, which is double the level of the previous generation, and a third could still be renting when they claim their pensions.
The number of households with children living in privately rented accommodation has tripled from 0.3 million in 2003 to 1.8 million in 2016, which means that half of all households with children now live in privately rented accommodation.
The Resolution Foundation estimates that 32% of total housing stock is owned by someone who could be described as ‘over-housed’, either because they significantly under-occupy their home or because they own multiple properties (other than those they rent out) and proposes a number of policy changes that would make it harder to be over-housed but more tax efficient to exit the category.
These include halving the rate of Stamp Duty Land Tax (SDLT) on the purchase of first properties but leaving the rate for purchasing additional properties unchanged, giving authority to city and regional mayors to limit residential property purchases in housing hot-spots to those resident in the UK, the abolition of any council tax discounts on second and empty properties, with only limited exceptions and introducing reforms to capital gains tax to incentivise owners of additional properties to sell to non-owners by tripling the capital gains allowance, as well as making CGT payable on death if passed onto anyone other than a spouse or civil partner at death.
The long-term undersupply of homes is also tackled by the report with suggestions to encourage the construction of appropriate housing and it addresses the insecurity of renting, with proposal to reform tenancy agreements. But there is no reference to tax changes for buy to let landlords.
Other policies proposed by the report include:
• “Light-touch” rent stabilisation that limits rent rises to CPI inflation for set three-year periods.
• Targeting Help to Buy equity loans by making them income contingent, offering assistance only to households with incomes of less than £60,000 a year or individuals earning less than £50,000 a year.
• Supporting the development of the Build to Rent sector by exempting institutional investors who build or buy Build to Rent properties within five years of building from the 3% surcharge on SDLT.