New Housing Supply

Lord Mackinlay of Richborough Excerpts

Monday 5th June 2023 Commons Chamber

[Craig Mackinlay (South Thanet) (Con)]

Very little has been said about the reason we have such demand for housing and the problems with planning at the moment. My right hon. Friend the Member for Haltemprice and Howden (Mr Davis) mentioned that the population is 10 million greater than in 1997. In this last year alone, we had net migration of 606,000. If we multiply that for the next 26 years, without population growth of excess births over deaths, that is a population of at least 15 million more over the next 26 years. If the deficit in the number of houses required today is 4.1 million, it will only get worse.

One wonders where the new people coming into the country—the 606,000 just last year and the big number the year before that—are actually living. Students are one issue. They may be in halls of residence, but many people will be joining family in the UK and friends perhaps, and they will not have found their feet yet. We also have to think about the existing population who are trying to leave home for the first time. Where will they live? We managed to accommodate some 170,000 from Ukraine over the last year, but that was almost an example of sofa-surfing. If people stay, they will want to find their feet in their own accommodation, which will not be shared HMO-type high-density accommodation, so we are building up an even bigger problem. No one has even discussed whether we will ever have enough builders and building materials to build out those numbers. My argument is one of supply of people and how we go about solving this issue.

[Andrew Western]

Will the hon. Gentleman give way?

[Craig Mackinlay]

I want to make progress; we have very little time this evening.

We need to reduce immigration. We need to take measures to reduce internal relocation, which does happen within the country. That is very much on the levelling-up agenda. No one would be more pleased than I, living in the south-east, if populations relocated up towards Carlisle and elsewhere. I would be absolutely delighted with that. Do we need to encourage families? We live differently these days. In times of old—perhaps I do look to the past—families stayed together. They lived together in multigenerational units, not least looking after each other as they got older. That is quite a norm in European countries. We may have to build prolifically and that is what we have been discussing this evening. Where do we build? We are all nimbys in one way or another and it is not surprising that most people in the country are. The property they own is likely to be either their biggest asset in life, or, more than likely, the biggest liability in terms of what they owe on it, so they do not want what they have purchased and created in their own communities to be at all tainted, and I do not blame people for thinking that way.

If I reflect on some sites across my constituency—we all have such sites—when there is a proposed development, there is always a great deal of opposition. In Preston, a village in my constituency, there was an old transport site. There was huge opposition while it was being built out. In Ash, another village, there was huge opposition when a development called Harfleet Gardens was being built out. But sometimes these smaller villages need extra development to make them credible-size villages, where one can support the shop, the pub, the chemist and everything else. So there is a sweet spot and I think most people recognise that.

I am in favour of brownfield development wherever and whenever it can happen, but a lot of new builds end up looking exactly the same, as described by many Members this evening, not least my right hon. Friend the Member for North West Hampshire (Kit Malthouse). Instead of solving a problem, they often create one.

I want to concentrate on putting our existing housing stock to best use, by using the tax system. Why do we not consider a downsizing relief for stamp duty? That would liberate some bigger houses that widows and widowers may be living in that are not perfect for them by any standard—expensive to heat, high council tax and all the rest of it. But when they look at the stamp duty cost of downsizing, particularly in higher cost areas, older people know the value of money and will say, “I’m simply not paying that, so I’ll stay where I am”—in the wrong accommodation and in the wrong place as their needs change.

Most importantly, there is an issue of capital gains tax. We are stopping people getting rid of second homes. A number of studies have been carried out of how many second homes there might be in the country. Rather than penalise people with increasing council tax and saying, “We know best. We aren’t going to allow you to have a second home—how dare you?”, I would rather create a tax system in which people are encouraged to get rid of their second home.

I am in practice as a chartered accountant, and I have had a number of cases of a client coming through the door, newly widowed, who has said that they would like to get rid of their second home. It might be in Devon, Kent or anywhere else. They are often smaller properties in the right places, where communities are complaining that they have been hollowed out because there is no settled community. They come to an accountant like me and say, “We’ve had this home since 1980. It cost us £20,000. I’d like to get rid of it.” I have to tell them, “You can’t get rid of that. You’ll face a 28% capital gains tax charge and then, if that cash is in your account and the natural happens in due course and you pass away, you will face an inheritance tax charge on the cash in your account. If you are not in a taxable estate, the value if you keep that property will simply be uplifted for your family, completely free of tax.”

We are binding up hundreds of thousands of second properties in the right places because of the tax trap. That could be hundreds of thousands of houses—perhaps whole years’ worth of the development that we are looking for, in the right places, simply because we are not brave enough. We are frightened of what the Opposition might say. We have talked a lot about cross-House unity. Surely, at times such as this, we should use the tax system to liberate homes and save some green belt or green areas that always cause problems, not least from the Lib Dems at election time. Let us work together and maximise the properties that we have. That would be a sincere step in the right direction.

I am taking a slightly different tack this evening. We have to look at the number of people—that is very much an immigration case—but let us use the properties we have, by using the tax system. That does not need one new build, one new builder or one new development. Let us do that first.