SOMETHING unprecedented happened in the property market last year. For the first time since records began, the number of homeowners in Britain actually fell.

In the past hundred years governments have made it their business to help people to realise their dream of home ownership. And for good reasons.

Ownership helps to encourage independence, it gives families more control over their destiny, it allows individuals the freedom to shape their own immediate environment in the way they want. Whether it’s getting the space a growing family needs, or having the freedom to stamp your personality on a place that’s really yours, ownership opens doors.

That’s why governments in the past worked hard to give people a helping hand on to the housing ladder. And, over the years, the numbers who were able to enjoy home ownership rose – every year, year on year. Until 2006.

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First-time buyers are deserting property market

According to figures, first-time buyers are leaving the property market, with numbers falling by a fifth in the past six months

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The fall in the number of people enjoying home ownership is a bleak statistic for all those who believe in spreading access to property as widely as possible. But that fall is hardly surprising when you consider some of the other bleak statistics that tell the story of what’s happening in the housing market. The cost of buying a house has spiralled in the past ten years. Stamp duty, which was a tax on only the most expensive homes in 1997, now hits most properties. Ten years ago the average first-time buyer paid nothing in stamp duty; now they pay at least £1,500. The Chancellor has failed to lift the stamp duty thresholds to reflect rising house prices, so many more people are caught in the net, and in some areas the tax bill is huge. The stamp duty bill for the average London home is now a huge £8,700. In the past, governments used the tax system to support home ownership – with tax relief, for example, on mortgage payments. But this Government has used the tax system, in an unprecedented way, to milk homeowners and penalise ownership. It’s time we moved back to a tax system that encouraged ownership rather than penalised it.

The Government has tried in the past few years to solve the housing crisis with various fancy schemes to offer key workers and others low-cost housing. But most of their schemes have been overly complex and bureaucratic. Across the country a quarter of the homes built for designated key workers are lying empty or have not been sold or let. The Social HomeBuy scheme, designed to help tenants on to the housing ladder, has led to only 23 homes being sold. If you compare that with the tens of thousands who benefited from the Right to Buy policy in the Eighties, the contrast is staggering.

Rather than more complexity and bureaucracy we need the Government to concentrate on the essentials. Use the tax system to support ownership.

Give social tenants a meaningfull right to buy, with appropriate discounts. Above all we need to build more homes. Over the past ten years we simply haven’t built enough and, because demand has been in excess of supply, prices have risen.

So we need to reform the planning system, which holds back land for new housing, to make the process of building homes much more efficient. At the moment, the housing market rewards those who have huge assets while shutting out the young, the aspiring and the ambitious. We need to reverse that trend and we can do that only if we get government back on the side of those who wish to build for the future.

Michael Gove is Shadow Minister for Housing

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