That stamp duty changes will do little to help most first time buyers?

[Creambun2]

The housing market in the uk is totally dysfunctional. This is bad for the country on many levels. Many people are not having families due to housing situation.

Not enough suitable houses being built. No houses being built for social renting.

When many people cannot even thing about buying when price to earnings ratio is crazy.

I hope all the idiots who cream themselves about high house prices realise that eventually there will be a large market correction.

And certain boomers who shit on about "I worked hard and didn't have an iphone and avacado toast" and the reason that young people can't afford housing can fuck right off. Please don't expect any sympathy from young people of all your assets are taken for your elderly care needs.

rather than actually doing the hard thing and putting on thinking caps

They introduced 3% additional Stamp Duty for second homes.
The Budget yesterday introduced permissions for Councils to charge 100% rates on empty properties.

Not all FTBs in London are young professionals who can just decide to skip off up north (its only like that on tv).

Some boroughs of London have the highest levels of child poverty and the 'working poor' in the country. High property prices have trapped these people in unreliable, overpriced rented housing at the whim of mercenary landlords.
Combined with job uncertainty and high childcare costs (you can't skip off to Hull if you rely on your mum down the road to provide childcare), the stamp duty changes are unlikely to help these people.

What would help them is rent controls, protected tenancies and being paid a reasonable wage.
And a government willing to clamp down on overseas investors. There are plenty of 'luxury' apartment blocks with starting prices in excess of £300k (for a studio flat) for sale. Who's buying them? Who do you think?

I inherited some money a few months ago which is allowing me to buy my first home outright. 5k reduction in stamp duty is a very welcome bonus.

It will help with furnishing my house, and will allow me to equip and rent out one of the spare rooms on airbnb soon after I move in. This will provided me with a little extra income.

"Unless you're talking about forcing them to sell and pay tax or accept a lesser price"

I'm talking about compulsory purchase orders for land, where it is bought at its agricultural value for development by the government.

Planning decisions are in the gift of the state. A stroke of a pen transforms a piece of land from being worth £9k a hectare to £4 million. The landowner has done sweet fuck all to earn that increase in value. Since it's a state decision that has created that wealth - and planning decisions are supposed to be made for the benefit of the public, I don't think individuals should be able to profit. I think most decent people would agree.

80% of the price of a house is the land, so decrease land costs and you can decrease house prices. What is more, this has actually been attempted- there have been times where a 100% tax on "the unearned increment" has been introduced.

It's time we started to laugh at the right-wing mantra that markets represent an efficient and effective way of sorting our housing.
They don't - they've taken us to crisis point. It's time to look at the fact that some people in this country own half of whole counties, and others can't afford decent housing - and to start thinking about land as a natural resource that we should think about as a common good. (I would like to see the planning system pay much more attention to both the farming value and the ecological value of different parcels - approaches like the greenbelt are far too broad-brush).

Didn't the last big crash in the 90s end up with a shit-ton of speculative investors snapping up all the repossessed houses for peanuts; and then turning into the hated BTL landlords of today?

In a Back To The Future type alternate reality, had that crash not happened, those houses would probably all be paid off now and owners would probably have moved up the property ladder, freeing up the supply of starter homes for the next generation - when supply>demand = lower prices.

So on that basis, is a crash to teach greedy homeowners a lesson (or whatever the OP's point is) better than not having one?

I see. So if you've owned land and looked after it, farmed it, tended it, in the cases of some people for generations, that means fuckall, the government should just take it and spend tax payers' money in doing so...

You're entitled to your view. It's one that makes me shudder though.

No, that's not exactly it. The person who owns the land should naturally get fair compensation for what that land would have earned them. That's only right.

What they should not be able to get is an additional cheque for the value of the land with planning permission. That's because the planning permission is a state decision, and the landowner has done absolutely nothing to earn that extra money. And the extra isn't a few thousand - in many cases in high-demand areas, it's millions. The figures I gave above, of a rise from £9k a hectare to £4m are for part of Oxfordshire. There's absolutely no way that even a supremely generous compensation payout would amount to anything like that difference.

And, as for taxpayers' money - you wouldn't be using it! The cost of the land would still be paid by the housebuyer, so the funds would return to the Treasury.

So the govt takes the land at market value regardless of whether its owner wants to sell.

Then increases the value by granting planning on it.

Then sells the land to the housebuilder to make the really massive profits.

OR pays the builder to build social houses (again the builder will want a massive profit because they don't do things for free). These are then let or sold at low prices.

None of this sounds ideal.

No, the government takes the land at agricultural value. Yes, the process is compulsory, but this is nothing new.

Government grants planning permission, increasing the land value, and then either:

• sells it on at market rates to the housebuilder, so that the unearned increment is claimed for the public. This means that all kinds of infrastructure and local assistance can be provided to the communities affected by the planning decision. Instead of winning a few crappy bits of public art and infrastructure via section 106 agreements, enormous amounts of money can be invested in common goods - local schools, local roads, etc. (Market rates should gradually decrease with such a scheme, too, since supply will be increased).

or

• The government uses the cheap land to build social housing very inexpensively, reducing the tax costs of providing good housing those who are poor, sick or vulnerable on the public purse.

It might help some people.
Watching the news last night on responses to this, points raised:

Young couple said the hardest part of being a FTB is trying to get the deposit together.

Concerns about it actually pushing house prices up.

The "unearned" increment (I have issues with that too, but will let it slide) goes to the tax payer. The builder then takes his point of flesh by charging a fortune for the new houses. I'm really not seeing why you think this is such a good thing, or why it justifies a forced sale of land.

OR the government has to find the tax money to build a lot of "cheap" houses. Which it will not recover on low rents, or not for a very long time. Meanwhile cheap builds won't last that long or that well and it won't be long before nobody wants to live there. And you've blighted lots of lovely agricultural land or green space for that. Nope, not seeing why you think that's so great either!

• pound of flesh!

It’s helping my son whose midway through his purchase. My daughters bpught a few months too soon. Seems unfair as he got Forces Help to Buy as well. Still means he’ll have extra for furnishings now.

I complete next week and this has come at the perfect time, we are very fortunate. The predicted 0.3% house price increase for the property I'm buying is around £700 whereas the SDLT was around £2.5k so would still have benfitted us if we bought later.

Do I think it'll solve any housing problems? No. But it is appreciated. We had to save 6 months for the SDLT alone (while paying the same amount in rent) can now use it for moving costs /repairs/ the overlap of rent and mortgage and feel a little less anxious about money.

This is in the north too by the way. No one I know buying a house has got it under the stamp duty threshold. By the time you've saved the deposit you're not at the stage of life that a 1 bed flat will work for you sadly.

Rebecca - we need houses. Fast. They have to go somewhere, and that means building on some currently unoccupied land. There is no way around this. It's better that a decision is taken centrally, to choose parcels of land that are of low agricultural or ecological value (as I said before, I think the planning system should pay more attention to this). It makes sense to develop near services for ecological sustainability and to avoid damaging landscapes elsewhere - so brownfield, but also low-grade land in the greenbelt need to be considered as well as sites for whole new towns as a possibility.

Secondly, compulsory purchase of land is pretty likely to lead to a downwards adjustment in prices - because supply of both land and housing will rise. The developer will still make a profit (we can argue the merits of a non-capitalist system elsewhere, I imagine you would like that even less, though, given your politics). This benefits those trying to get onto the ladder.

Thirdly, the government IS in the housing game for the long term, unless you think that the English parliament is about to be overthrown? Things like housing policy absolutely should be seen as long term investments. And there are many ways of delivering housing that are financially as well as socially sustainable. The garden city movement is one example.

Also, the whole point is that massive public good is done by the unearned increment going into public funds. The whole point of infrastructure spending is that it actually assists everyone - including business. See Mazzucato's work on this.

"We need first time buyers to be priced out of the market so that house prices fall to more sensible levels."

not sure that happens though - as long as btl is still profitable (or appears to be - I suspect it is less profitable than the lls think, but anyway), and mortgage finance is available for btl, the btl buyer just replaces the ftb and buys the property to rent it to the thwarted ftb!

One answer is to tax second/third/fourth home ownership much more heavily - but then house prices in areas that have not soared may fall, and put owners into negative equity. Funnily enough George Osborne started to try to increase taxes on btl and second homes. I'd say it's now politically impossible to do more of that - govt cannot risk putting taxes up significantly for anyone at the moment! (except drinkers of some types of alcohol?)

I own a flat in the north I bought in my 20s. I then moved south to retrain and it has taken me 10 years to be in a position where I can try to sell the flat and buy a house in the south. The value of the flat has not risen over that period but prices in the south have become ridiculous. Unfortunately the flat has been on the market all year and despite two offers has not sold as both fell through. So I am being forced to rent it out again as we can no longer afford to have it empty.
The changes to BTL rules mean that if we buy a house to live in I will have to pay over £20k in stamp duty, making it unaffordable. This only affects us as we would be moving from rented to bought. People moving their main residence from owned to owned do not have to pay the surcharge. My husband is a FTB. I am a very reluctant landlord. We are now stuck in rented accommodation and due to our age likely to be so forever. We cannot move north as there are no jobs in my profession. This is not just a FTB problem. Incidentally the only people who viewed my flat were investors, not people wanting to live there themselves.

purits there has already been much speculation that the 100% council tax on empty properties will have no impact in London where CT rates are very low - one example was empty properties in K&C in the highest tax band may now face a £4K CT which is nothing when they have empty properties valued at £2- 85 million - if you own a property like this and are just sitting on it, what's £4K - they probably have that down the back of a sofa.
This is because many expensive London boroughs have punitive CT rates compared with the rest of the country but are the most likely places for owners to sit with them empty.