Helen Adams: Give young people a stake in the homeowner democracy

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Helen AdamsCan I just say how important it is that sites such as HandsOffOurFuture are here to remind everyone that there is a huge population of people who will be driving the economy over the next three decades but as far as I can see they will be suffering taxation without representation.

My business is in helping young people on to the housing ladder and from what the hundreds of young people we advise each month are telling me they don’t have a stake in our homeowning democracy.

The first thing to realise is how important it is to make housing affordable.

In the UK, there is a cultural desire to own a property – it is believed to be imperative to own the roof over one’s head. When you look long term, you can see a good financial reason too. When drawing a pension, would it be easy to still be finding the monthly rent for your landlord at 65+ years old? There are enough worries about how to live on a pension without it having to cover rent – which has traditionally not been needed as a mortgage is normally paid off by then. It could be a pension time bomb!

Having recognised how important it is, politicians should do more to make housing affordable.

This means, providing more homes within shared ownership schemes, available to more people, providing properties within trusts at cost and keeping making sure people can still afford them. In fact, the whole concept of joining forces with another party to reduce costs whether the co-owner be a friend, sibling or housing association should be promoted – it can mean that a larger more spacious home can be afforded and costs can be significantly reduced, whilst importantly, a mortgage is starting to be paid off.

I constantly hear from those who visit us that they wish shared ownership schemes were more widely available. They don’t just mean the number of them, but also that eligibility should be widened. I’m sure the Government could do more to incentivise housebuilders to build more low-cost houses and offer more shared ownership schemes to bolster the numbers supplied by Housing Associations.

Keeping the economy such that interest rates remain low and employment is high are important, as is an increase in the salaries of key workers would complement the key worker schemes available to them.

Over the last 5 years or so, those ‘that have’ have often snapped up typical first time properties contributing to a spiraling of prices of 1 and 2 bedroom properties. The typical first time property is now often owned by a landlord, causing a polarisation. The landlords are having their mortgages paid off for them whilst at the same time preventing first time buyers from having access to them because the prices have been pushed up.

Gordon Brown recently threw voters a juicy morsel in the form of a change to the stamp duty threshold but when we polled our user base straight after the budget they confirmed our worst fears. In many cases, especially in the South East the change made absolutely no difference to affordability as the average starter house price is above £120,000.

Stamp duty it is just one of the many factors that makes buying a first home expensive – along with finding a deposit and arranging finance to buy the property. Raising the threshold helps – but it would also help landlords, so taxing landlords higher on the income they gain from their rental properties could help discourage them from this avenue as an investment.

A rethink of the structure of stamp duty and who it should be paid by should be carried out. Whilst it has earned the Government a great deal of money, the recent changes only serve to earn the Government marginally less.

Helen Adams is Director of first time buyers’ advice site www.FirstRungNow.com

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