With a new survey from Oxford Economics suggesting average London homes will reach a price tag of £650k within six years and close to £800k by 2023 it isn’t the time for government to gloat about how much revenue it will reap.
The incumbent government expects an extra £5.5bn in stamp duty revenue while Labour and Lib Dems will have a harder time justifying a Mansion Tax.
But policymakers are only focussing on vote-winning schemes. Hence London Mayor Boris Johnson can brag about being on target to create 100k new affordable homes.
The problem with the supply of affordable housing is that it seldom stays that way.
Meanwhile, we incentivise first time buyers with FinMin George Osborne’s new scheme to secure mortgages.
The problem is that taken separately these polices all help fuel property prices.
What we need is something which discourages the stratospheric prices of central London. It requires a top down solution rather than fuelling bottom up.
For that, we need to discourage foreign buy-to-let landlords by ensuring they pay capital gains taxes etc.
And since few foreign buyers have the vote it should not be detrimental to our politicians’ hopes of re-election.