McDonnell’s distorted and dangerous version of Right to Buy9:01 AM, 5th September 2019
About 2 weeks ago 35
Housebuilders share prices fell immediately to post Budget reaction that BTL mortgage interest tax relief will be capped to the basic rate of 20%.
Barratt shares fell 5.7%
Taylor Wimpey shares fell 5%
Persimmon down 4.7%
This is direct instant economic indicator to what the financial markets think about the reduction in tax relief, as no other policies seemed to have such a direct connection to house building.
Far from freeing up the market to make it easier for home buyers, the markets seem to be saying they think less homes will be bought because of a reduction in demand from investors.
Basic economic rules say that if this is the consequence, and less homes are built (supply decreases), but the same number of people still need housing (e.g. demand does not decrease) then the Price (i.e. rents and property values) must increase, all other non-open market factors being equal.
That would definitely not help the housing crisis !
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