Rethinking the UK Housing Market: Beyond Taxation to Innovative Solutions

Today, I read an insightful article in The Times, where two professionals were asked about the impact of taxing international buyers on the UK housing market. The question was whether a tax increase for overseas buyers was the right approach to assist first-time buyers in getting on the housing ladder. Luke Mills from CBRE UK and Adam Hawksbee from the think tank Onward offered their perspectives, raising some interesting points.

As someone deeply entrenched in the housing sector, I am undecided. However, one thing is clear: simply taxing international buyers may not have the desired effect on improving housing affordability. There's a need to look beyond conventional methods and consider more innovative solutions.

Proposing a First-Year Sales Restriction One idea is implementing a first-year sales restriction policy. Under this proposal, newly built properties would be available exclusively to UK nationals who live and work in the country for the first year after completion. This approach, exemplified by Westminster Council in their Cosway Street, W1 development, prioritises residents, offering a more direct solution than tax increases on foreign buyers.

Addressing the Challenge of Building Affordable Homes The issue extends to the construction of affordable homes. Developers often need more time to embark on such projects due to lower profit margins, exacerbated by rising costs and labour shortages. Government intervention, in the form of subsidies or financial incentives, could make the development of affordable housing more appealing.

Towards Practical Solutions in Housing, The UK's housing crisis calls for practical solutions beyond conventional methods. As we consider options like sales restrictions and government incentives for affordable housing, the effectiveness of these approaches will depend on thoughtful implementation and industry cooperation. The path to a more balanced housing market is a collective effort shaped by our choices today.

The full article can be found here: https://www.thetimes.co.uk/article/how-much-stamp-duty-uk-should-buyers-from-abroad-pay-65s9h5hd0