The Resolution Foundation has published its much anticipated Intergenerational Commission, exploring the assumption that each generation will do better than the one before it. Following two years of research, its New Generational Contract puts forward some core – and radical – ideas for intergenerational fairness, with a focus on housing.
In its proposals for housing, the New Generation Contract recommends three core proposals.
Private rented sector Indeterminate tenancies should be the sole form of private rental contract, with light-touch rent stabilisation limiting rent increases to inflation for three-year periods and disputes settled by a new housing tribunal.
Young first-time buyers Replace council tax with a progressive property tax with surcharges on second and empty properties; halve stamp duty rates to encourage moving; and a time-limited capital gains tax cut to incentivise owners of additional properties to sell to first-time buyers.
Building more homes Piloting community land auctions so local authorities can ensure more land is brought forward for house building, underpinned by stronger compulsory purchase powers; and a £1.7 billion building precept allowing local authorities to raise funds for house building in their area.
The report draws a series of conclusions that summarise the lack of growth that Millennials experience, not least than they earn less than their predecessors, have to pay more in rent etc, are less able to move jobs, are less likely to own their own home, are less likely to get good pensions.
Basically, they’re spending more, and getting less in return, and are faced with looking after an ageing population that will take a severe toll on public spending.
One of the reports bold suggestions, which received much media attention, was that all 25-year-olds would receive £10,000 ‘citizens inheritance’ for housing or business use, financed by a new ‘lifetime receipts’ inheritance tax to replace inheritance duties.
Kate Andrews, News Editor at the Institute of Economic Affairs said: “The UK is facing a major intergenerational crisis, and the Resolution Foundation’s commission has highlighted an array of areas, including housing and healthcare, where young people are getting a raw deal. But a one-off cash transfer would only address the symptoms of these deep-rooted problems, which require an overhaul of state restrictions and structures.
“£10,000 is a large sum of money, but with the cost of living so wildly out of control, this kind of pay-out wouldn’t be near enough for many young people to pay off their debts or get on to the housing ladder. A much more effective and less costly approach would be to liberalise our restrictive planning system to bring down the cost of housing altogether