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Building society economist calls Budget ‘missed opportunity’

  • 10/03/2017
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The chief economist of mutual Yorkshire Building Society expressed doubts that the Budget and recent Housing White Paper could fix the broken housing market.

The chief economist of Yorkshire Building Society said he doubts the Budget and recent Housing White Paper could actually fix Britain’s broken housing market.

Andrew McPhillips, chief economist at the mutual, said: “There remains real doubt that measures included in the Budget and recent Housing White Paper will help to tackle the growing housing crisis in the UK.”

He described the Budget as a “missed opportunity to help tens of thousands of first-time buyers and families who have out-grown their homes by making Stamp Duty a seller’s tax, rather than a buyer’s tax”. The building society had campaigned for such a change to Stamp Duty in advance of the Budget.

McPhillips said: “In today’s housing market, Stamp Duty in its present form is simply not fit-for-purpose. Stamp Duty causes blockages at all levels in the housing market by disproportionately disadvantaging those with growing families who need to move up the property ladder. It adds to the burden of upfront costs for those looking to get on to the housing ladder, particularly in London where our average first-time buyer pays £13,000 in Stamp Duty alone.

More power at local level

But the building society economist admitted that even a belt and braces reform of Stamp Duty wouldn’t be enough to solve the supply crisis in the housing market.

He explained: “We welcome the government’s Housing White Paper which aims to address the market’s underlying problems, but building the number of homes required will rely on more powers and resources for Mayors and councils.

“All councils should be given greater freedoms to manage their own budgets and borrow against existing properties to build homes.

“Whatever form it takes, devolution of current national Homes and Communities Agency grant programmes and extended borrowing powers for councils are essential to making sure housing supply is delivered on, not just promised.”

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