The Financial Secretary to the Treasury and Paymaster General wishes to make a statement on stamp duty land tax—a subject he has obviously decided is of intense and pressing interest to the House—but I feel sure that, with his usual sensitivity to the concerns of colleagues who wish to speak in the subsequent debate, he has no plans to expatiate at length.
With your permission, Mr Speaker, I will make a statement on the quarterly stamp duty land tax statistics published this morning.
As right hon. and hon. Members are aware, the Government announced at autumn Budget 2017 that we were introducing stamp duty relief for first-time buyers, unlocking invaluable support for first-home buyers up and down the country. The relief cuts stamp duty for first-time buyers who purchase a property for less than £500,000. Those who purchase a home for between £300,000 and £500,000 will save £5,000. The relief abolishes stamp duty for first-time buyers who purchase a property for £300,000 or less, and more than 80% of first-time buyers will not pay any stamp duty as a consequence. Although we want to help all buyers, the Government consider that it is fair to target the support where it is needed most. The Government therefore think it only right to reduce the up-front costs that cash-constrained first-time buyers need to pay, giving them much-needed support with their first purchase.
The quarterly stamp duty statistics published this morning reveal, for the first time, the tangible impact of first-time buyers relief. I am pleased to announce that between the coming into effect of the relief on Budget day on 22 November last year and the end of March 2018, a significant 69,000 first-time buyers benefited from it. That figure represents nearly 20% of all residential transactions, and it is broadly in line with the official estimate at autumn Budget 2017.
Over the next five years, the relief is projected to help more than 1 million first-time buyers to get on to the housing ladder. It is part of a broader housing package announced by the Government at autumn Budget last year—an ambitious package of new policies designed to tackle the housing challenge—that consists of wide-ranging planning reform, additional spending and a new agency, Homes England, to work more effectively with the housing market.
Although we are firmly on track to raise annual housing supply to its highest level since the 1970s, we are aware that housing is a complex issue and that there is no single solution to the challenge. We know, for example, that we need to support the private sector and local authorities to convert planning permissions into homes built. As my right hon. Friend the Chancellor set out at spring statement, the Treasury and my hon. Friend the Minister for Housing are working closely together to ensure that that happens. Government will be working with 44 local authorities that have bid into the £4.1 billion housing infrastructure fund to unlock homes in areas of high demand.
We are going further; over the next five years we have committed at least £44 billion of capital funding, loans and guarantees to support the housing market. We will more than double the size of the housing growth partnership with Lloyds banking group to £220 million, to help to provide additional finance for small builders. London will receive an additional £1.7 billion to deliver a further 26,000 affordable homes, including homes for social rent. That will take total affordable housing delivery in London to more than 116,000 by the end of 2021-22.
Housing stock is on track to be higher than ever before during the upcoming decade, and the Government are committed to supporting those people who aspire to make their dream of home ownership a reality sooner rather than later. That is why measures such as the stamp duty relief for first-time buyers are so important. More than 95% of first-time buyers paying stamp duty will benefit from the relief.
The Government are committed to ensuring that everyone in this country can afford to buy a home if they choose to do so, and the Government have taken steps to make home ownership a reality for many more people. Targeted policies such as the first home buyers stamp duty relief are supported by other robust, ambitious and groundbreaking reforms to housing policy in the United Kingdom. Together, they will transform new home creation for years to come.
The Government appear to have arranged to give this statement so that they can pat themselves on the back, while reducing the amount of time spent on customs union with the EU. I appreciate that that issue may be controversial—albeit only for the Government; every other actor seems to feel that some kind of customs union is a good idea—but that should not prevent democracy from running its course on the matter. The Government’s cunning plan to introduce the statement today has spectacularly backfired, because rather than offering an opportunity for congratulation and digression, it has merely provided a chance to indicate the Government’s failure to deal with the housing crisis.
The Government have said—we heard it again just now—that their stamp duty cut is intended to back home ownership, but home ownership has fallen to a 30-year low under this Government. They say that the cut was intended to help first-time buyers, but there are now a million fewer under-45s who own their own home than there were in 2010. Home ownership was up by some 1 million under Labour, but it has fallen since 2010 under Conservative Ministers as part of this Government’s eight years of failure on housing.
At the root of that failure is an inability to increase the supply of genuinely affordable housing. I do not need to set out how the stamp duty cut has failed to deal with that issue; I will use the words of the Office for Budget Responsibility, which stated that
“the main gainers from the policy are people who already own property,”
not first-time buyers. In contrast, measures from the Government to increase supply are woefully inadequate. To take just one example, local authorities will only be able to bid into a pot in order to borrow to build—a farcical situation when demand is so pressing. The number of genuinely affordable homes is declining, not increasing, under this Government.
We parliamentarians see all around us the worst impact of the Government’s failure on housing, whether it is on the people we walk past who are rough sleeping in the city of London—rough sleeping is now at record levels here, as it is in many other cities—or the 120,000 children who are living in temporary accommodation, and whose families come to see us in our constituency surgeries. I am keen to hear the Minister’s response to the question of whether he has commissioned research into the impact of this flagship measure on prices, in the absence of decisive measures to increase affordable supply.
It would be helpful to hear from the Minister how Her Majesty’s Revenue and Customs is dealing with what appears to be a quadrupling of money-back claims related to a malfunctioning online calculator. What HMRC rather amusingly—it is not amusing for the people affected—calls a “ready reckoner” appears to be anything but, in view of its failure to take into account relevant stamp duty discounts. I would be grateful to hear from the Minister when it will be amended so that it properly reflects mixed-use properties.
On the subject of confusion over what stamp duty should be paid, it would be good to hear from the Minister about what the Government are doing to deal with those who make bulk purchases of individual flats, thus avoiding the buy-to-let surcharge. Let us imagine, as a hypothetical example, someone purchasing seven flats, worth between £450,000 and £1 million each, in a seaside town. They might try to do so using their own company, rather than as an individual. If so, I would hope that they registered the beneficial ownership of that company with Companies House—a matter that I look forward to debating with the Minister next week in our consideration of the Sanctions and Anti-Money Laundering Bill. Aside from beneficial ownership, however, by undertaking such a bulk purchase, our imaginary, hypothetical person would avoid a significant amount of stamp duty—say, around £100,000—which could have gone into our cash-strapped NHS. Can the Minister please inform the House what he is doing to deal with that loophole?
Above all, can we please have genuine action from the Government to deal with our appalling housing crisis— we parliamentarians cannot fail to notice that it is causing much misery to our constituents and blighting the lives of many children—rather than misplaced self-congratulation?
I thank the hon. Lady for her contribution and her questions. She opened by asking what was the motivation for giving this statement today. I reassure her that it is that we believe that housing policy is one of the great issues of our age and we are determined to get on top of it, as the Chancellor set out in the autumn Budget. That is why—to move on to her question about how we will drive up the level of home ownership—the Chancellor made it clear at Budget that a further £15 billion would be made available, taking us up to £44 billion over the next five years, to drive up the supply of new homes. That is alongside planning changes and the review that my right hon. Friend the Member for West Dorset (Sir Oliver Letwin) is undertaking to ensure that where planning permission is granted, houses are actually built. I suggest that we look at our record. Last year there were 217,000 new properties in this country, which is the largest figure since 2005-06. That indicates that our move towards having 300,000 more properties on the market by the middle of the next decade is realistic.
The hon. Lady asked specific questions about the effect of stamp duty relief on house prices, and she will know that the OBR forecast a small impact of 0.3%. She will also know that that projection did not take into account the various supply-side measures that I have mentioned, and other measures that we have undertaken. She asked about the specific case of properties bought within a corporate wrapper, and I hope she will be familiar with the annual tax on enveloped dwellings, which stands at 15% if the property is put into the wrapper. Indeed, on the basis she outlined where a property is then rented out, ongoing charges recruit tax in that way.
May I draw the attention of the House to my entry in the Register of Members’ Financial Interests? I welcome the Minister’s statement, and express my support for stamp duty relief for first-time buyers. That measure exists to reverse the trend of declining home ownership that began in 2003, and it is the right thing to do. Will the Minister confirm the commitment made in the autumn Budget to increase the amount of housing supply delivered by small and medium-sized developers, as they are a crucial part of solving the housing crisis in the UK?
My hon. Friend is right to mention smaller builders, and we recognise the importance of ensuring that finance is available to them. They play a key role in providing new housing, and I confirm that the £630 million announced in the Budget for the small-site infrastructure fund will be going ahead, as will measures that we have taken to support bank lending specifically to smaller builders.
If the Government are serious about boosting housing provision, will the Minister join me in congratulating councils such as Sutton Council, which is building council homes for the first time in 30 years? What more can the Minister do to support it to provide homes that are genuinely affordable?
I have already, at length, gone through the various measures we have taken to support increased housing supply. Given that I have been urged to stray towards brevity rather than to respond at length, I will leave it there, other than to say that we will have our foot firmly to the floor. When it comes to council housing, we have of course built twice as much since 2010 than the Labour Government built during their 13 years in office.
I say to the House that I have not detected much beetling taking place. I exhorted colleagues to beetle across to the Chamber if they wished to take part in the next debate, but by my reckoning, fewer than half the would-be contributors to that debate have landed in the Chamber. I hope there will be some beetling or toddling of a hasty kind pretty soon.
That is extremely accommodating of the right hon. Gentleman, and I would expect no less of him. He can rest assured that the next debate will start no later than 12.30 pm, and preferably earlier, notwithstanding the fact that his own erudition is endlessly intoxicating.
My area has many thousands of extant planning permissions that have yet to be brought forward. How will the Treasury try to get those planning permissions to a state where we can build houses? Is it about time that we had a sensible debate on land value taxation?
The hon. Gentleman raises an important point: there is little point in land that has planning consent if properties are not swiftly built on it. My right hon. Friend the Member for West Dorset (Sir Oliver Letwin) is conducting a review of exactly that matter, and we will come to the House in due course with our proposals.
Horsham has very high house price multiples, and I welcome the Government’s efforts to help first-time buyers with that vital first step on the ladder. I also welcome the impact of that policy from a macroeconomic perspective. The Financial Policy Committee at the Bank of England has talked about broadening home ownership as a way of encouraging and improving financial stability. That should have an important impact, which I also welcome.
I thank my hon. Friend for his kind words. As well as the many advantages and benefits of home ownership for individuals, society and the economy, his point about financial stability is right and another reason why the Government are determined to make progress.
Order. As colleagues will know if they have studied the Annunciator, the second of the two debates scheduled for this afternoon has been withdrawn, so we have simply one debate on customs and borders. Members will recall that when the House debated estimates on 26 and 27 February, the motions were proposed by the Backbench Business Committee under an arrangement recommended by the Procedure Committee. Today, we have a complementary proceeding of a Backbench Business day in which the motion has been proposed by the Liaison Committee.