James Wild

My hon. Friend draws attention to the unintended consequences of the stamp duty measure. I wonder how much involvement the Deputy Prime Minister and her Department had in drawing it up, or whether it was drawn up in the Treasury just to get a line into the Red Book and fill out the Government’s spending plans. New clause 7 would require the Chancellor to publish an assessment of the impact that increased rates for additional dwellings are having on the housing market as a whole, and in particular on the demand for homes in England and Northern Ireland. Pegasus Insight has reported that nearly 20% of landlords across England and Wales sold homes in the last 12 months, significantly more than the 8% who purchased properties in that period. We see increased rents as a result. The latest figures from the Office for National Statistics show average UK private rents increasing by 8.7% in the 12 months to October. When the cost of living is high and rents are increasing, why are the Government taking steps that could make matters worse for our constituents? On the point made by the hon. Member for St Austell and Newquay (Noah Law), clauses 50 to 53 may increase the chance of properties switching from long-term to short-term lets, which is a concern in my constituency. We need a balance of properties—some that people can rent and those that people can buy—so that people can live and work in the area where they grew up. The Government’s stated policy objective for the stamp duty measures is to disincentivise the acquisition of buy-to-let properties and free up housing stock for main and first-time buyers, but nowhere in their impact note is the private rental sector mentioned. My right hon. Friend the Member for North West Hampshire (Kit Malthouse) asked the Minister what impact she thought the changes could have, and what modelling had been done of the effect on the rental market; I am afraid that answer came there none. Hopefully she will have had some inspiration by the time she winds up the debate and can give some answers, because the impact note does not have any information on that point. I find that surprising. Once again, that is why it is essential that we review these measures to see what the real-world impact is on the rental market. Our new clauses would enable us to do just that. Encouraging home ownership and helping first-time buyers to get on the housing ladder is the right thing to do. However, that should not come at the expense of the private rental sector. As the shadow Chancellor, my right hon. Friend the Member for Central Devon (Mel Stride), put it in the Budget debate, activity in the housing market will be dampened and people will be discouraged from downsizing, which will put pressure on housing supply and labour mobility. I am proud that while in government, the Conservatives helped more people get on to the housing ladder through schemes such as First Homes, shared ownership, right to buy and the lifetime individual savings account, and doubled the threshold for stamp duty. However, with only one in eight renters able to afford to purchase a home in the area where they live, renting is the only viable option for many. What is the Minister’s response to those who say that increasing stamp duty will reduce the supply of rental housing, and that rents will increase as a result? I must briefly address the structural tax issues that the clauses create. I am grateful to the Chartered Institute of Taxation for the discussions that we have had. There is now a top residential rate of 19%, compared with a top rate of 5% for purchase of a non-residential or mixed property, so taxpayers may be incentivised to argue that the property that they are buying is non-residential or mixed-use—for example, it may have a paddock that they would use—to take advantage of the lower rate. A number of those cases have come to the first-tier tribunal and higher court. I would be grateful if the Minister addressed the risk that she sees there, and told us what HMRC has advised her and whether increased compliance costs will arise as a result of the divergence.