Changes to Britain’s tax regime are at the core of fixing the housing market, a parliamentary committee has been told.
The House of Lords economic affairs committee has launched an inquiry into the supply and affordability of housing and the effectiveness of the government’s policies.
In its first session it heard from Christopher Walker, the head of housing, planning and urban policy at Policy Exchange, who said building large quantities of new homes was only one element in tackling the issue.
He said: “There is probably something to be said about changing the way we use our housing stock.
“Our housing stock isn’t used terribly efficiently in this country, we have a lot of under-occupancy for example, particularly in the owner-occupied sector.
“People of the older generation who want to downsize and move to a smaller house and not have two or three spare bedrooms, don’t have a suitable alternative to down-size to.
“Certainly when it comes to London, where demand is among the most prevalent in the country, there is probably a lot more we could do to encourage more efficient use of housing stock which starts to get us into conversations about tax.”
According to the Land Registry the average house price in England and Wales is now £186,350, while a house in London will cost, on average, £503,431.
Official figures from the department for communities and local government showed that 118,760 homes were completed during 2014.
Dame Kate Barker, the author of the Barker Review of Housing Supply, which was published in 2004, also gave evidence and said 300,000 homes a year would be needed, but was sceptical about a land-value tax.
She said: “We ought to tax land more than we do. But one thing you need to think about but if you tax permissioned land what would it do to your incentives.
“If you had this change you wouldn’t ever want permission for 1,000 houses, you would do it in little slugs.”
Adviser view
David Hollingworth, associate director at Bath-based London & Country Mortgages, said: “With people living longer there is an aspect to the housing market with older people remaining in larger properties for longer, which would typically be a home for a younger family.
“It is okay to incentivise that move but you would probably need to increase the supply of desirable properties for those older homeowners.”
