The Chancellor has been urged not to use the Budget to make short-term adjustments to property taxation, with an independent committee arguing instead for wholesale reform of a system it says is stifling the housing market.

The Independent Housing Policy and Delivery Oversight Committee, chaired by Sir Vince Cable, said that tinkering with tax for revenue-raising purposes would risk further disruption to a market already under severe strain.

Cable (pictured), the former business secretary, said: “There is no doubt that the housing market is not working efficiently and property taxation is a significant factor. The case for major reform of the whole property tax system – from Stamp Duty Land Tax to inheritance tax to council tax and VAT – is almost unarguable.

“Recent speculation about piecemeal changes in the Budget for revenue raising purposes, if they came about, would be a step in the wrong direction. To take just one example, putting National Insurance tax on landlords would be most likely to lead to higher rents for tenants. That is, in effect, an increase in taxation on working people.”

He added that meaningful reform demanded “at the least, a White Paper and extensive consultation” to avoid unintended consequences.

REFORM OVER TINKERING

The committee, which met for the first time last month, identified a series of themes it intends to track, including affordability, the impact of the government’s Renters’ Rights Bill, the ability of tenants to save for deposits, planning reform, the quality and type of homes being built, and the pressures facing small and medium-sized builders.

It intends to publish reports every few months using a set of housing metrics covering supply, affordability, stock quality and need, such as the number of households in temporary accommodation.

Cable said a well-functioning market would deliver “improvements to the economy, greater labour mobility, supporting skills development and providing more and better-quality housing”.