Pensions and property. Two things that most of us want and work hard to get. They are both of a significant size with UK residential property weighing in at around £7tn, and the value of pension funds alone at around £2.5tn. They are also two assets that present challenges in terms of their ability to exacerbate inequality between groups and generations. Older people and buy-to-let landlords own far greater amounts of residential property than younger groups, an imbalance that is reflected in pensions too, although with an additional gender divide in the latter. As such, pensions and property present themselves as the perfect targets for a government hunting for ways to support the economy and shrink the nation’s current high debt burden and with no objections to basking in the happy consequence of chipping away at inequality.
One way of getting the economy off its knees is by removing obstacles to housebuilding, a policy that also tackles head on the problem of chronic undersupply and affordability for younger generations. Hence this government’s “once in a generation” radical reform of planning so that 300,000 new homes can be built each year. But dismantling planning laws, as Alex Newman highlights here, elicits huge resistance: no one wants the countryside to be concreted over and no one trusts developers to stick to brownfield sites.
Taxing property through a wealth tax or a new type of council tax has been suggested more than once during the pandemic as a way to raise billions, but tends to get an equally unreceptive welcome. Our ‘homes’, unlike second properties or buy-to-let rentals, are sacrosanct. Many people regard their home as their pension or as an inheritance for their children. A Wealth Tax Commission proposal earlier this year to apply a one-off 5 per cent levy on all assets in excess of £500,000 was roundly rejected by respondents when it was revealed that the assets would include people’s pension pots and homes.