A recent report by housing charity Shelter and YouGov has placed a focus on the UK taxation system with many homeowners/ tenants struggling. While some people are pointing the finger at the ever-growing cost of UK property perhaps we need to look at the UK taxation system which seems to penalise those in employment. The results of this survey are extremely distressing but whether the authorities will sit up and listen remains to be seen.
Stretched to breaking point
The survey took in 8381 adults in England of which 1581 were working families with children. When asked whether they would be able to afford their housing costs (including mortgage and rental payments) if they lost their current employment position a staggering 23% said they would be unable to cover their costs at all. A further 37% suggested they had savings to cover housing costs for more than one month with 48% of those surveyed confirmed that housing costs are the biggest drain on their budget.
While there is no doubt that housing costs have increased over the last few years the taxation system in the UK has not assisted this. Only a few weeks ago we saw the UK authorities increasing various tax charges for those in the buy to let property market with these costs eventually passed on to tenants. So, could the UK authorities do more to help homeowners/tenants?
Lack of real help
There seems to be a genuine lack of assistance for those struggling to cover their housing costs immediately after losing their jobs. The fact that these individuals have paid into the UK taxation system for many years seems to mean nothing when they need help. Indeed local authorities across the UK have been gradually cutting various budgets and making it more difficult for those in trouble to obtain the financial assistance they need.
One issue for those struggling in the aftermath of losing their employment is finding the right place to go to so they can even discuss the subject of assistance. Surely if these services are available they should be advertised in such a way as to catch the eye of those in trouble?
UK house prices
Often we feel as though we are repeating ourselves because the ever-growing cost of UK property is impacting both homeowners and tenants. The UK authorities have promised time and time again to increase the number of new builds and introduce an array of social housing. This would take some of the steam out of the UK property market but running a deficit in these particular areas helps support property prices – which ultimately brings in votes from the electorate. What government in their right mind would look to sabotage the UK property market and see the value of property held by the electorate fall?
Conclusion
There is no doubt that the UK taxation system, both in employment and investment terms, is significantly more complicated than it should be. The recent introduction of additional charges in areas such as the buy to let market has not helped because eventually these increased costs will be passed on to tenants. The lack of new builds and social housing is fanning the flames of demand with limited increase in supply. There is only one way prices will move in this situation?