This is How Sajid Javid Should Be Spending Our Stamp Duty Billions

In February this year the Communities Secretary, Sajid Javid, laid some foundations in addressing the housing crisis by acknowledging that the market itself is broken.

However, for whatever reason, the minister refused to acknowledge that the problem reaches beyond parliament and that the private sector needs to be involved.

Ex-Chancellor now media mogul, George Osbourne introduced the current system of SDLT. Source: Flickr

Paradoxically, the growth of our housing crisis mirrors an exponential expansion of UK prop-tech companies that bring dynamism, innovation and a young, talented workforce to the property market.

But having talent means nothing without a pitch to play on. The lack of affordable housing will inevitably lead to an exodus of this talent and Javid needs to look at harnessing it as part of a government-led solution.

Stimulating the private sector is de rigueur these days with a plethora of government innovation grants. However, despite the government pocketing £12.4bn in stamp duty in the 12 months up to July 2017, £2bn of which is a direct result of measures brought in to address the housing crisis, Javid and his team continue to ignore the stimulate to accumulate mantra.

Even a portion of that £12.4bn revenue ring-fenced to private sector innovation would give some much needed impetus to a housing market that is in stagnation at best.

Mark Peacock started after spending 10 years working in the city. Source: Snapdup

If the government is really on the side of business and common sense then the kind of GCSE-level economic thinking it needs to pursue is to ensure that to be eligible for a government-funded scheme, companies need to be working towards a solution which deals with one or more of the following:

1) The high cost of housing relative to income
2) The punitive costs involved in moving home
3) The geographical imbalance of supply and utility – in certain parts of the country, there is simply not enough affordable housing, whereas other areas have high vacancy rates

Ironically (or maybe not) Javid’s background should mean that he is fully able to understand and kick-start these proposals in his role as Secretary of State for Communities and Local Government.

Ex-banker Javid was the youngest Vice President in Deutsche Bank’s history when he worked there at only 25 years old. Source: Wikimedia

SDLT (Stamp Duty Land Tax) may be letters that ring alarm bells for landlords – I am not here to argue about its philosophical merits. But a fund heading north of £12bn is a serious amount of money and surely it is common sense to bolster the supply chain to help ease the demand.

If Javid does not listen to what a successful prop-tech industry is saying, then he is not only propagating a housing crisis but also risking the future of an industry where Britain has got real talent.

And that’s a big ‘no’ from us.

Mark Peacock was a headhunter in the City for over 10 years prior to founding – a free digital platform where consumers looking for a property to rent or buy can have their next home hunted down for them by a network of proactive and service focused estate agents.

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