Foreign-Owned Uk Property

Part of the debate – in the House of Commons at 5:00 pm on 20th June 2013.

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Photo of Simon Hughes Simon Hughes Deputy Leader, Liberal Democrats 5:00 pm, 20th June 2013

This is a real issue. I shall put some suggestions to the Minister, of which I gave him notice earlier today, so I hope I am not taking him completely by surprise.

People who have lived here for five years, 10 years, 15 years or all their life now cannot find a place they can afford. More offensive, even if they see them, they suddenly discover that the properties have been offered for sale abroad and are not available, or by the time people in this country can get their finances together, somebody has bought the lot. That is an unacceptable practice. Free market economics is a good starting point for the global economy, but responsible Governments, including I hope those with my colleagues in Government, should always be willing to intervene in the market where there is good reason and where the market is not working for the purposes that are the priority. Meeting housing need is now the priority, not meeting global housing demand.

We cannot go on as we are. We do not have enough land to build on at a reasonable price, there is much too little building of affordable housing, and now there is increasing purchase by foreign owners of the property that does become available. We need more supply and we need to moderate the demand that is forcing up prices even more. The purpose of this debate is to put down a marker that there needs to be a response at central Government level, at London government level and at local government level as well. I am not the only person who thinks that. Colleagues across the House and in different sorts of constituencies share my view. Even if I cannot get all my wishes announced in the spending review next week, I hope that at the latest by the time of the Budget next year I can persuade colleagues to make the sort of changes we need. I hope also that I can get the two Select Committees—Treasury and Communities and Local Government—and the National Audit Office to look into the subject, because I know they have an interest and think they would do a good job.

We want a change of policy, a change of strategy. We want a big change in the number of affordable homes available for residents of these islands, and we want it now. I will give the Minister my shopping list now, so that he has time to respond.

I hope that work outside this place and by the Select Committees and the NAO will be helpful on this, because I would like the Government to compile a report on legislation passed elsewhere to tackle this problem. As I said, Singapore and Denmark have taken action in recent years, and I understand that Australia, Canada, Thailand and some states of the USA have done so, too. Those are not socialist republics; they are countries with free-market economies that understand they have to do something to look after the people within their shores, to whom they have an obligation.

I should be grateful if the Government, over the next few weeks, commissioned up-to-date research, using the all the sources available, into the extent to which residential property acquired by individuals who are not domiciled or resident here or companies that are not registered here is: acquired for investment only and kept empty; occasionally used; occupied primarily by staff; a home other than the principal home; or rented out. If the information could be broken down by local authority and postcode, that would be helpful. This is not just a London issue; it affects the west midlands and many of the big cities in England and other parts of the UK.

There may be policy and tax changes we could make. We cannot discriminate between UK and other EU citizens on the basis of their citizenship—I understand that entirely. However, it seems to me that we could have differential stamp duty or council tax, or another form of acquisition or disposal tax, or an annual asset tax, on properties held by non-EU citizens or companies based outside the EU. Secondly, we could have differential council tax or other tax by category of use, so a second or third home or a company-let flat, for example, would be in different categories. I am less certain that this would be the answer to many of the problems, but we could have differentiation of tax or council tax by price, with the aim of adding an extra tax on the middle-ranking properties, which are the ones that our constituents want to buy. That might have adverse knock-on effects, so I am not categorically proposing that, but I think the idea should be considered.

I believe it would be possible to have priority bidding for rent, shared ownership or purchase for people who have lived in the area for a certain period. We could not do that by nationality, probably, but we could do it by length of residence. Councils are now allowed to give priority on their waiting lists to people who have lived in the area for a certain period, so surely we could do the same in the sale, shared ownership and rental sectors. We could require residential properties to be advertised in this country at the same time as or before they are advertised anywhere else. We could do what the London Docklands development corporation did, which is ensure that properties are initially offered locally. There would be legal questions to deal with, but we could consider it. Finally, we could give tax incentives to people or companies willing to invest in affordable housing for rent, shared ownership or sale at below-average prices, rather than give them only to those who want to build expensive properties. We could incentivise the right sort of investment.

We could pilot these proposals, or give powers to the Mayor or local authorities in London and elsewhere to try differential planning and council tax arrangements, to see the effects on the market. As the Mayor of London has suggested, we could ask the Government to make sure that any taxation—for example, stamp duty—generated in a particular local authority from a certain type of property goes into the housing fund for that local authority.

I am open to any solution that works. I hope that the Minister and his Department are open to helping us to tackle this major and growing concern to voters of all parties and none, and all our constituents. I do not think we can say that nothing can be done.