Budget 2014: the next five years

Never mind today and tomorrow: what does the Budget mean for housing over the longer term?

As usual, some of the most revealing information comes not in the speech or the Treasury’s background documents but in the Economic and Fiscal Outlook published by the Office for Budget Responsibility. This time around the detail and the forecasts for the next five years have a lot to say about housing benefit, the welfare cap and the housing market.

Read the rest of this post on Inside Edge, my blog for Inside Housing


Beyond help

It’s hard to remember a more damning select committee report than the one just published on Help to Buy – and it has not even started yet.

You don’t even have to read between the lines of the Treasury committee report on the Budget to detect its doubts about a policy announced by chancellor George Osborne last month. It leaves him with a string of questions about how it will work and a list of concerns about unintended consequences.

Read the rest of this post on Inside Edge, my blog for Inside Housing


Bedrooms, football and the top rate of tax

This is a tale of two cities. Of one city and two different planets. And of one City and one United.

On Monday a wave of welfare reforms began to hit claimants and tenants across the country. Today the top rate of tax is cut from 50p to 45p on earnings above £150,000. For the connection between the two, in the immortal words of Carlos Tevez:

welcome_to_manchester

The city is home to the richest football team in the English Premier League, Manchester City, and the most successful, Manchester United (give or take the location of Old Trafford). It is also the bedroom tax capital of the UK with more than 14,000 tenants facing an average loss of £624 a year. They have lost a total of £168,000 this week – less than many of the footballers earn in a week on their own – and will lose a total of £8,736,000 this year.

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The black comedy of property taxation

Why is it that so few chancellors ever consider the effect of their decisions on taxation on housing?

The obvious answers are political ones: housing is near the bottom of the list of priorities; no chancellor can afford to alienate the homeowning majority; and any changes to the tax system inevitably create losers as well as winners.

As George Osborne puts the finishing touches to the Budget, speculation continues about several measures that could have a huge impact: a long-overdue clampdown on stamp duty avoidance (Osborne has already committed to this – see my blog for Inside Housing here); extra council tax bands (a distinct possibility); and a mansion tax (advocated by the Lib Dems but supposedly ruled out for now by David Cameron). Yet all of the ideas are about raising revenue for tax cuts elsewhere. There is no suggestion of the more general reform of property taxation that is so badly needed.

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Rubber stamp

So George Osborne will come down ‘like a ton of bricks’ on people who avoid stamp duty by buying homes through offshore companies. What took so long?

The chancellor confirmed in TV interviews over the weekend that the loophole beloved of celebrities, rock stars and the global super-rich will be closed in the Budget on Wednesday.

Read the rest of this post on Inside Edge, my blog for Inside Housing.


Family values

Anyone who has followed the debates about housing benefit cuts and the Welfare Reform Bill will probably have been thinking the same as me during the debates this week about the mansion tax and child benefit.

Surely we heard exactly the same arguments about ‘fairness’ and ‘family’ in all the debates over the last year about welfare reform and housing benefit cuts?

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