Jacob Rees-Mogg and the Institute of Economic Affairs (IEA) have suggested that reverting stamp duty land tax levels to those applied in 2010 will help people to move as opposed to acting as a clear barrier.
The ‘Raising the Roof: How to solve the United Kingdom’s housing crisis’, authored by Jacob Rees-Mogg amongst others, considered the UK’s failings in the planning system and offered solutions for the future.
The report looked into the broken tax system as a clear barrier to the flow of housing sales in the UK. It argued that only by cutting tax and decentralising tax fiscal decentralisation by giving more power and local tax money back into the hands of local authorities will help alleviate some of the current problems.
Since the war, 95% of tax is collected centrally; local authorities are seen to have little incentive in advocating house builds to help generate additional revenue from new residents.
Currently, the financial implications of stamp duty land tax (SDLT) is harming the ability to move. It is claimed that reverting to 2010 levels and devolving the power to local government’s who can then decrease the tax further if the local property market is struggling.
Buy-to-let investors will also feel vindicated throughout this report as it argues that discrimination of this sector, through surcharges on SDLT, should be ended.
To a large extent, historic planning laws, including the 1947 Town and Country Planning Act, were blamed for placing planning under ‘unprecedented statutory control’ which, according to the report, has caused at least half the rise in house prices over the last generation.
Additionally, the report looked into the Green Belts Act, claiming that it has more than doubled in size since the 1970s and has usurped previously developed and brown field land, meaning that more is being built on attractive areas.
The report speculated that planning laws and public values have favoured big home builders that are able to factor excessive planning costs into the price of land and gamble on a development. Developers being forced to plough more costs into planning has resulted in the identikit estates proliferating throughout the UK as money spent on design is usurped in the pre planning and planning stages.
However, bland and unattractive builds have increased a sense of nimbyism with more local residents determined to force a planning rejection which clogs up resources, increases costs and slows the building process considerably.
Should the local authorities have more power to control SDLT? Will a reduction to 2011 levels encourage more movement up and down the property ladder?
