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UK politians favour council tax change rather than new mansion tax
The majority of MPs in the UK believe additional higher rate council tax bands would be a better way to reform annual property taxes on high value homes than introducing a mansion tax. A survey found 69% back the council tax change while 75% agree with the need for a revaluation of council tax in general. The poll commissioned by the British Property Federation (BPF) also looked specifically at what Labour MPs think as it is the Labour Party that wants to introduce a mansion tax if it comes to power at the general election in May. It found that 39% of Labour Party’s MPs favour additional higher rate council tax bands over a mansion tax, despite the party championing the tax as one of its flagship policies ahead of the election. Just over half, 56%, thought a mansion tax would be preferable. The majority of the Liberal Democrat MPs surveyed, 89%, also prefer additional council tax bands to a mansion tax, as do 92% Conservative MPs. The Liberal Democrats first mooted the idea of a mansion tax in 2012. Asked separately whether they would support a revaluation of all homes to update council tax, 75% of MPs agreed. Support is strongest amongst Labour MPs at 87%, compared to 64% of Conservative MPs. It seems that this is a priority issue for MPs, with the majority, 53%, of those who would like to see reform preferring revaluation during the next parliament. The BPF has long made the case for council tax reform, pointing out that the 24 year old tax is still calculated on house prices in 1991. Since then, house price inflation has varied significantly, ranging from 160% to over 400% across England’s regions. It has urged policymakers to consider council tax revaluation and the addition of more council tax bands as a fairer and more efficient alternative to the mansion tax, which would be unfairly concentrated in London and could act as a deterrent to investment in the UK’s built environment. The BPF says that a council tax revaluation would be very easy to implement in the next Parliament because there is already legislative provision for it in the Local Government Act 2003. It would also accord with the advice of the Lyons Inquiry to Labour in 2007, which amongst its recommendations, suggested that a future government should revalue council tax and add new council tax bands, in order to update the tax base and improve fairness for taxpayers. ‘This poll shows that a full council tax revaluation rightly commands widespread political support, particularly across the Labour party, and that the majority of MPs recognise that basing council tax on 1991 house prices is simply unsustainable,’ said Ian Fletcher, director of policy at the British Property Federation. ‘The mansion tax is a political gimmick that is more about the narrative of rich vs the rest than anything else. Reforming council tax through a revaluation and raising revenue… Continue reading
Latest RICS market survey shows construction work up in the UK
Construction workloads in the UK rose in the final quarter of 2014, but the shortage of bricklayers reached a record high, according to the latest market survey from the Royal Institution of Chartered Surveyors. Some 52% of respondents reported that workloads in the commercial sector had grown in the fourth quarter of 2014, which is the fourth consecutive quarter where the reading for workloads has been above 50%. Private housing followed at a net balance of 45% and industrial at 40%, while overall UK construction workloads reached a 39% net balance. Looking at growth restraints, around 60% of respondents reported that either material shortages, skill shortages or financial constraints were impeding further sector growth, while the proportion of respondents reporting labour shortages across all of the main trades climbed to an all-time high of 48%. Despite these factors and anecdotal evidence that the upcoming election in May is creating industry uncertainty, confidence remains firm with 75% more respondents expecting workloads to increase and 55% more expecting employment to increase. Members’ anticipate growth in workloads of 3.4% in 2015 with jobs in the sector expected to rise by a further 3%. Elsewhere, the infrastructure sector continued to see what has been a much steadier pace of growth over the last 12 months and in the final quarter of 2014 some 23% more respondents reported a rise in workload activity. In Northern Ireland, the picture remains a little more downbeat compared to the rest of the UK. The survey report says that labour shortages have become increasingly onerous in every area of the sector since the industry began to recover in the middle of 2013, with bricklayers and quantity surveyors in particularly short supply. Now that workloads are rising and optimism is growing, the practical challenges are in providing the skilled labour the industry needs and in alleviating the financial constraints, which saw nine months of decreased lending in 2014. ‘The political challenges in the run-up to the election are around shoring up industry confidence to ensure the framework for effective planning and delivery of projects are in place to create long term growth that is spread across the UK. This will also enable the investment that the industry needs to raise productivity and encourage new training initiatives,’ said Alan Muse, director of built environment professional groups at RICS. Continue reading
Annual house price growth in England and Wales down to single digits
Annual house price growth in England and Wales fell back into single figures, as house prices paused in December, the latest index shows. Values in London and the South East are cooling but price growth across other regions remains steady, according to the LSL Property Services/Acadata index. Overall prices are up 9.6% year on year to an average of £278,997 but there was no change month on month. However, when London and the South East is excluded from the figures then the monthly rise was 0.4%. The index data also shows that growth accelerated at top end of the market in 2014, but price rises slowed at the bottom of this sector. But total home sales across 2014 were up 18% year on year as stamp duty reforms boosted activity in December. ‘There was a brief interlude in the tempo of house price growth in December, with values pausing for breath after a chorus of uninterrupted monthly climbs since May 2013. On a monthly basis, property price inflation peaked last January, and has gently petered out over the course of the past year,’ said Adrian Gill, director of Reeds Rains and Your Move estate agents. ‘This has pruned annual house price growth back to single digit territory again, recording a steadier 9.6% rise in average property values in England and Wales in the year ending December, down from 10.6% recorded in November,’ he added. He pointed out that there has been an about turn in the South East of the country, and London in particular. ‘Property values in the capital and surrounding areas are beginning to concede ground after significant advancement over the last year. Average house prices dropped in a third of all London boroughs in the month to November, with Southwark experiencing the sharpest fall in average values of 3.1%,’ said Gill. He also pointed out that monthly house price growth has continued if the exceptional London and South East regions are excluded from the calculations. Similarly, annual price rises across England and Wales are stable when these regions are omitted, as home values across the rest of the country stand firm and continue forward on their calmer trajectory. ‘But it’s not just geography that disrupts the march of house price growth across England and Wales. It is the most expensive properties that are showing the strongest gains in value, while the rate of price growth is slowing among cheaper homes,’ he explained. ‘Properties worth over £250,000 have seen average annual growth of 10.7%. But those valued below £153,000 have typically witnessed a year on year price increase of just 2.9%. As the two paths of growth diverge, this is widening the gap between the different rungs of the housing ladder,’ he said. He explained that 2014 was the year of the first time buyer, with the second Help to Buy scheme offering further assistance to aspiring home owners throughout the country, and ensured that many potential buyers could still navigate around the… Continue reading
