How stamp duty freeze will boost housing supply in South Yorkshire – Miriam Cates

THE health of our housing market is an indicator of the health of our whole economy.

Will a short-term cut to stamp duty boost the housing market?
Will a short-term cut to stamp duty boost the housing market?

Buying a property or moving house does not just involve the exchange of ​money and the transfer of deeds; it supports other associated industries, and a large number of jobs in many trades such as plumbers, builders and electricians.

During the acute phase of Covid-19, many sectors of our economy were forced to grind to a halt, including the housing market, where in May 2020 property transactions were down by 50 per cent. Other sectors have received welcome relief on a sectoral basis from the Government’s measures to boost our economy, such as grants for the retail, leisure and hospitality businesses, and the ‘eat out to help out’ scheme.

The housing market also needs a stimulus to catalyse its restart, so I welcome the temporary relief to stamp duty land tax, which will do just that.

Miriam Cates is the Conservative MP for Penistone and Stocksbridge.

In normal times, when the market is in equilibrium, stamp duty should be paid just like any other tax. Right now, however, as we emerge from a period of sharp decline in housing sales, the market is far from equilibrium and it is right to take most property purchases out of stamp duty to encourage transactions.

A cut to stamp duty is also the first of many measures that the Government will introduce to fix our housing crisis. Any action to reduce the cost of moving will be welcome to my constituents in Penistone and Stocksbridge where many local people cannot afford to own their own home or to move up the property ladder as their family grows.

Parents and grandparents are worried that the next generation will not be able to afford to stay local and will instead have to leave our towns and villages and our wonderful communities.

As well as a short-term measure to restart the housing market, there is strong consensus that to fix our housing market in the longer term we must build more homes. I am pleased, therefore, that the Government intend to bring in reforms of our planning system that will enable more houses to be built more quickly.

A cut to stamp duty was included in Chancellor Rishi Sunak's economic statement last week, but will it have the desired effect?w

That is particularly necessary in cities like Sheffield, where the local authority still has no Local Plan, or even a draft Local Plan, which means there is no evidence-based understanding of or consensus on where and what types of housing should be built. That puts greenfield sites in danger when brownfield sites are still available.

We need to increase the supply of housing and evidence suggests that we need to build over 300,000 new homes each year, both to keep up with demand and to address ​the backlog.

We are all aware that there has been a sharp increase in the number of young people who are living with their parents – a rise of nearly 50 per cent in 20 years. The Government’s housing reforms and the Prime Minister’s £12bn affordable homes programme will rightly address that issue and give young people the opportunity to own their own homes.

I take a moment to consider another less welcome reason for the increase in demand for housing. Over the past two decades, the number of people living alone in the UK has risen by 20 per cent, and the number of 45 to 64-year-olds living alone has increased by 53 per cent over the same period.

One of the principal reasons is the number of middle-aged men who live on their own, largely as a result of relationship breakdown. When marriages and partnerships end, one household becomes two, property costs can double, children no longer have the benefit of both parents under one roof, and, for those adults left living alone – often fathers – loneliness and its effects on wellbeing can follow.

Inevitably, of course, not all marriages and co-habiting relationships will last. When there is irretrievable breakdown, new households must be formed, but if relationship breakdown is one of the key drivers for housing demand, we must address the causes of such breakdowns, not because of the impact on housing but because of the impact on people.

Relationship breakdown is costly – emotionally, psychologically and financially – and it has a huge impact on children. As we look to address one of the UK’s greatest challenges – a lack of housing – let us also focus our efforts on addressing another one and consider how government, local authorities, the voluntary and faith sectors and local communities can better support couples and families to stay together.

Miriam Cates is the Conservative MP for Penistone and Stocksbridge. She spoke in a Commons debate on stamp duty – this is an edited version.

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