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Purplebricks boss Sam Mitchell has launched a scathing attack on the Conservatives saying they must take responsibility for the housing crisis.
After 16 housing ministers in 14 years of the Tories’ time in power, the party needs to face up to its failings, the Purplebricks CEO says.
Mass building
He calls on the Government to build more houses, including a “mass social housing building programme” to relieve the pressure on the PRS.
The Conservative Party must take responsibility for the situation.”
“The lack of housing stock in the UK is a significant factor in the difficulties faced by first-time buyers and, having gone through 16 housing ministers in 14 years, the Conservative Party must take responsibility for the situation.”
Mitchell, who was CEO at Strike when it bought Purplebricks for a £1 last year, says the housing problems have been compounded by the sell-off of council housing in the 1980s.
Rents skyrocketing
“With rents skyrocketing, it has been increasingly difficult for first-time buyers to save for a deposit.
If the Government is really serious about tackling this issue…it must be clear about its commitment to build new homes.”
“As a result, we’re seeing young people live at home with their families for much longer and fewer first-time buyers,” he says in a press statement.
“If the Government is really serious about tackling this issue, as the Housing Secretary [Michael Gove] appears to suggest, it must be clear about its commitment to build new homes, including a mass social housing building programme.
“This will free up the private rented sector as well as normalise rents and housing choice for tenants.”
Yes, the Government should fund a mass social housebuilding programme, ideally as collaborative, cooperative junior partners (yes, I know, unlikely) with large private sector builders in Joint Ventures, so the houses are built to common standards, Government has skin in the game and will the effect of its own regulations for a change, and new communities/estate will have a mixture in ownership patterns and property styles.
The Government should also abolish S106 and CIL obligations and stop making the private housebuilding sector pay for the Government’s failure to fund social housing and most of the infrastructure related to new housing development. S106 and CIL make countless projects financially unviable for small and medium sized developer-builders, whose numbers have collapsed since 2008: S106 and CIL come straight off the bottom line of their profits. And no, SMEs cannot just compensate for S106 and CIL by paying less for their land: land viable for planning is so scarce, landowners will just refuse to sell.
The Government will still receive extra fiscal revenue to help fund its housebuilding programme, in the form of increased corporation tax on housebuilders’ higher turnover and profits, and through capital gains tax on land sales. The latter should be extended to owner-occupiers selling off land from their principal private residences. The Government will also save substantial sums on the expenditure side, because the more it can get people out of B&Bs and the PRS into social housing, the more it will save in housing benefit.
Two even more radical solutions, which no political party will touch, are:
1) make owner-occupiers pay CGT on increases in their house prices when they sell, less approved maintenance costs. Since Labour Chancellor James Callaghan introduced CGT in 1965, tax-free capital gains on Principal Private Residences for life has had a massively distorting effect on house prices and the pool of internal UK investment capital: far too much money goes into housing. Making homeowners pay CGT will also be fair as it will level the playing field with landlords, who already have to pay 18% and 28% CGT.
The CGT taxes on house sales could be used in part to fund a reduction in stamp duty, which is now on a sliding scale of 5% and 10% for most buyers and inhibits people from moving home. People would then feel that they were getting something in return for the addition of CGT, and of course the CGT would also be used to fund a mass programme of new social housing.
2) Rebase council tax. It’s about time we have more council house bands, and that all the people who have for decades been building extensions pay an appropriate level of tax for the increased size of their homes.
Nett migration figures at 750,000.00 per annum has nothing to do with it?