New Tory Thinktank advocates Land Value Capture and Restricting Buy to Let

Guardian

Private landlords have put home ownership beyond the reach of at least 2 million families, research shows, while Britain has built only half as many new homes as France over the same period.

The radical report from the new Conservative  hinktank Onwardr ecommends ending or severely curtailing tax breaks for buy-to-let and private landlords, a stronger role for local councils and major reform of the planning system to allow communities rather than developers to lead the process.

The report, which was written by Neil O’Brien, a former aide to George Osborne who also worked for Theresa May at No 10, calls for government intervention in the housing market, including giving London councils the power to limit foreign ownership.

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“We need to change the balance between the rented sector and home ownership,” O’Brien said. “We should protect existing landlords but discourage more people from investing in rental property, because the buy-to-let boom has bid up prices and reduced homeownership among younger people.”

Previous governments have already acted to curb tax relief on mortgage repayments and maintenance for landlords, but the thinktank says it is still a privileged form of investment that reduces the number of homes available for owner-occupiers while reducing the amount of capital available for more productive investment.

“The UK is one of the cheapest countries for investors involved in residential rental investments,” the report finds.

Emphasising the link between shortage of supply and rising home prices, the report offers radical ideas for increasing the number of new homes.

It argues that planning permission for a hectare of agricultural land can add as much as £2.5m to its value. If the community could benefit from some of the increase, the report argues, it could be used to pay for the kind of services and infrastructure that new developments sometimes lack.

Instead of piecemeal development, it recommends that councils should have the power to put together land and create new settlements with services. It looks across Europe, where most local authorities have strong powers to initiate and shape development and link it to public transport.

It proposes better support to help councils plan new developments drawing on expertise from across the sector, as well as abroad. It also recommends much higher density urban occupation, where the UK lags behind most other comparable countries.

The report wants councils to be able to borrow to buy development land that hey could sell on with planning permission, allowing the local community to benefit from the increased value.

Will Tanner, a former Downing Street policy adviser who is now director of Onward, said it was possible to tackle the housing crisis without concreting over the green belt.

“If the government wants to regain the support of young people … it must be unflinching in its pursuit of greater home ownership. That means hard choices like ending tax breaks for new landlords and giving councils much stronger powers.”

One thought on “New Tory Thinktank advocates Land Value Capture and Restricting Buy to Let

  1. Or you could implement the monetary policies of a universal dividend and high percentage discount/rebate policy throughout the entire economic process at the point of sale as well as at retail sale which is not only the terminal summing of all costs and so prices for every consumer item and service and last but not least the very expression point for any and all forms of inflation. That way a $1000/mo dividend with a 50% retail discount creates $2000/mo worth of purchasing power for everyone 18 and older….even if they don’t do a lick, and if they have even part time employment of $20,000/yr that means a two person houshold would have $4000/mo/48000/yr in dividend and $20,000 x 2 = $40000 x2 with the discount/rebate or $128000/yr in total purchasing power. So every family could probably rather quickly and easily be able to have both a permanent and vacation home….and the rental market would be able to “wither away”.

    And remember a home is the RETAIL product of a home builder so a $200k home would only cost the consumer $100k. Kinda hard to manufacture asset inflation…..with a 50% discount/rebate policy at retail sale.

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