This letter was first printed in this week’s issue of The Spectator.
Matthew Parris is correct (10 February). There is no shortage of housing stock, and no feasible programme of housebuilding will fix the housing market. The generations endowed with housing wealth through tax and lending policies continued by all parties since 1959 have no incentive to use it productively; the next generation competes for a disproportionately small portion of the stock.
But there is a solution to be explored. Someone who invests in improving the productivity of their labour will pay tax (including employee and employer NI) at a marginal rate of around 40 to 60 per cent, while someone who invests in under-occupied property pays no tax on the gain in value. We must shift the balance of taxation away from earnings and on to property.