The British housing market is, by common consent, among the most dysfunctional in the developed world. Sky-high house prices, regressive property taxes, obstacles to productivity growth, economic and social inequality in and between generations — these are just a handful of the housing-related problems that have nagged away at policymakers over decades.
In her forthcoming Budget, chancellor Rachel Reeves is expected to outline plans to reform property tax. Reform is clearly needed and is potentially an important step towards a better functioning market. Yet the issues involved are highly complex, not least because of the interactions between the housing market and the wider economy. One risk among many is that the Treasury’s urgent need for tax revenue may conflict with broader economic and social goals.
