Just as Britain’s growing army of beleaguered would-be homeowners was beginning to lose hope, Rishi Sunak rides to the rescue. In next week’s Budget, the Chancellor is expected to extend the current stamp duty holiday, possibly by six weeks or possibly until the end of June, thus preventing the tax due on home purchases from suddenly exploding at the end of March. Thanks, Rishi, for making buying a house cheaper! No wonder Britain’s famously impartial national broadcaster once drew you as Superman.
Except it mostly isn’t would-be homeowners who will benefit from this policy. Stamp duty isn’t charged on first-time buyers purchasing properties worth under £300,000, so many of them don’t pay it – it’s other house-buyers who’ll get most of the benefit. What’s more, a stamp duty holiday doesn’t necessarily make buying a home cheaper: since house prices are determined largely by what buyers can afford to pay, some of the “cut” is almost certain to be swallowed up by higher house prices. In news that shouldn’t surprise anyone who’s been paying attention, Sunak’s latest wheeze won’t really benefit the younger, poorer section of society. Turns out there were several reasons it was stupid to draw him as Superman.
I don’t want to be too down on this. Stamp duty is a stupid tax, bafflingly charged to buyers rather than sellers, and has to be paid for up-front rather than from a mortgage. In a better world, we’d ditch it and find a fairer way of taxing property. It is very This Government to have a policy ostensibly intended to benefit homebuyers that will, in fact, benefit homeowners – but I’m finding it hard to get too worked up about it because it’s the least of the problems faced by the younger half of British society at the moment. A quick precis of some of the others:
1. It’s the youngest workers who have been hardest hit by the economic crisis triggered by the pandemic, with vastly more under-25s losing their jobs since the start of the crisis than any other cohort (see graph below). Younger workers are also the most likely to be on furlough – so when Sunak eventually ends the scheme, those unemployment numbers are going to get a lot worse.
Graph by Michael Goodier
2. The evidence is that youth unemployment has a “scarring” effect on people’s income and employment prospects that can last for decades. So the economic impact of the pandemic may well reverberate for a long time to come.
3. Mortgage lenders have offered mortgage holidays. But renters have received no equivalent financial relief, and a growing number are in debt to their landlords. This will not end well.
4. Remote working is much easier for people with larger homes and more established careers. Even if younger workers have space for a home office, which – let’s face it – most of them don’t, they will still lose out from missing the opportunities to learn from colleagues and build professional networks that being in an office provides.
5. For most of the last year, consenting adults who don’t live with a partner have effectively been banned from having sex.
6. Students are being charged over £9,000 a year in tuition fees to attend university through Zoom, and while every academic I know is working their backside off to provide both educational and pastoral support, it remains deeply uncomfortable to compare the fees being charged with the experience being offered.
7. Last autumn students were told it was safe to return to university, only to find themselves locked into halls of residence that had turned into plague colonies — ostensibly because the financial interests of institutions and landlords were seen as more important than the interests of the students themselves. Nobody, as far as I can tell, has been prosecuted for this.
8. Gavin Williamson, passim, but especially last year’s A-level results fiasco and, let’s be honest, this year’s impending A-level results fiasco, too.
9. Will anyone really be shocked if/when it turns out that there is a scarring effect from children missing months of school?
And so on.
All of this is without even noting that it’s the young who rely most on the hospitality industry if they want social contact and the emotional support it provides. Being stuck at home for a year when you’re rich, married and living in a big house with a garden is one thing. For a 24-year-old living in one room in a house shared with strangers, it’s quite another.
Britain has been looking more and more like a gerontocracy for some time, with the over-50s coddled and bombarded with freebies and soaring housing equity, and the under-30s expected to pick up the tab. But the Covid crisis has thrown this situation into sharp relief. The young have been expected to sacrifice their education, careers and lives to reduce the spread of a pandemic that is far deadlier to the old. For the most part, they have done so willingly. But once this is over we need to have a conversation about generational inequality, and how the old and rich can repay the young and poor for their sacrifice. It really is the least they can do.