Make sure you get your cut

Redrow this week became the latest to claim that it can build the deputy prime minister’s pet project, the £60,000 house. Heck, Redrow reckons it’s so easy it plans to sell the homes for £10,000 less.

Prescott should be delighted that housebuilders have fallen for his latest wheeze. One nagging question remains, though: why? Why would housebuilders with all their millions of pounds of profits – and with all talk of a housing crash quietly forgotten – want to slash their margins?

The answer lies in two places. Tottenham Court Road and Horse Guards Road, to be precise. The first, as many of you will know, is the London headquarters of the Housing Corporation and the home, as far as developers are concerned, of billions of pounds of social housing grant. The deputy prime minister has agreed that non-registered social landlords should get access to this cash and housebuilders up and down the land are more than willing to oblige.

The second is the address of HM Treasury. Gordon Brown will unveil his eighth Budget next Wednesday and, so far, the one dead cert for inclusion is a rise in the stamp duty threshold.

The smart money is on the 1% charge being levied at £150,000 as opposed to the current £60,000. Housebuilders would dearly love this to happen because it will make it easier for people to buy homes. As a result, they will cater to any of Prescott’s whims.

If housebuilders get a good result from the Budget, councils and RSLs must make sure they profit too

The consequences for the social housing sector are significant. If housebuilders are building more homes as a result of increased demand from first-time buyers, there will be more affordable housing through the section 106 planning gain system.

The change would also have another, less obvious effect. As we report on page 28, the government’s £690m Key Worker Living scheme is struggling to attract interest in shared-ownership properties. Figures from Metropolitan Home Ownership – one of the associations involved – show that all of the 1100 key workers it has

helped in the past 12 months have paid stamp duty. If the threshold was £150,000, this figure would be halved. Metropolitan estimates that if the government made this change, interest in shared homeownership would soar.

Recent Budgets have been good to social housing. If, as seems likely, the housebuilders get a good result from the Budget, local authorities and housing associations must make sure they profit too. Increased levels of affordable housing is a pretty good place to start.