You may have missed it among all the headline-grabbing talk of increasing the minimum wage and yet more cuts to welfare, but as part of George Osborne’s summer budget announcements, this Conservative government also abolished the requirement for all new homes to be ‘zero carbon’ from April 2016.
Whilst it is reported that some housebuilders had already started work to meet the challenge, the major plc housebuilders would have probably known all along that the election of a Conservative government would at the very least, have enabled some ‘wiggle-room’ to water down or delay the requirements – if not the full scale capitulation reversal of the zero carbon policy that Osborne announced.
This pointless reversal – an appalling act of policy vandalism, will undoubtedly raise energy bills and carbon emissions well into the next century, sending out totally wrong message for the Paris climate talks. The Conservative government has cynically chosen put both house builders’ and energy providers’ profit making ahead of its deep moral responsibility to act to mitigate any possible impact on our climate in the future.
The zero-carbon commitment begun in 2006 and supported through successive governments has now been re interpreted as unnecessary ‘red tape’, allegedly holding back new house building projects, productivity and even the general UK economy.
Boost for first-time buyers as buy-to-let landlords’ profits are slashed in crackdown on mortgage interest tax relief. Thousands of buy-to-let landlords will see their earnings hit after George Osborne cracked down on mortgage interest tax relief in his summer Budget. These were the headlines but the reality is a bit different.
Whilst the proposals are a welcome start to end the unfair tax relief enjoyed by buy to let landlords, nothing is going to change any time soon. The Mañana Chancellor ,George Osborne hits buy to let landlords in his latest Budget – but not until April 2017 and even then the measure will be phased in over four years! This is to give landlords time to “sort out their affairs.” More likely, it will enable many UK landlords to side-step the new measure by choosing to own properties through corporate structures to continue to benefit from relief on mortgage interest payments with lower corporation tax, cut to 18% by 2020, another incentive according to mortgage brokers.
In the budget, tax relief for landlords on mortgage interest payments is to fall and they will only be able to claim the basic rate 20% tax relief on mortgage interest payments rather than 45%, or their highest rate. The Chancellor said the move will “level the playing field for homebuyers and investors”. The current tax break for landlords is estimated to cost the Treasury £6.3billion every year a Freedom of Information request revealed.
The highest paid 1% receives around 8% of the national income. The wealthiest 1% owns 23% of the national wealth. It is in property where greatest inequalities lie, not income.
Most people are in favour of higher wages and benefits for the poor, higher taxes on the rich 1% and the provision of food, clothing, shelter and health care for all. Who are against this? The rich. Even though the vast majority of our population is in favour of progressive and fairer policies, the rich are better placed to influence politics. Why else do wealthy individuals give so generously to political parties? The rich have always prioritised their own self-interests above the needs of the many.
The UK residential market is a prime example. The rich have squeezed out any resemblance of affordability for the many, through ever-higher house prices and declining real term wages. Demand from private buy-to let landlords, who have the benefit of generous tax breaks that homebuyers do not, have helped force house prices ever higher at the expense of working first-time buyers.
Policies such as ‘Right to Buy’ have reduced the amount of affordable, state-owned homes for rent by people on low wages or benefits. The result, those that need to rent are being forced into the private rental sector, with higher demand from those receiving housing benefit resulting in the rich landlords increasing rents ever higher, when rents can be covered by taxpayers to the tune of up to £15,000 a year, irrespective of what is considered a ‘reasonable’ or ‘affordable’ rent.