What would happen if the taxpayer (via the Government) decided to give first-time buyers otherwise unable to raise a deposit £10,000 so they could buy a new home?
The answer, at least on the face of it, is a bit quirky and, perhaps, for house builders quite delightful.
The sums suggest the taxpayer would be about £20,000 better off. Well that is the answer from putting together some very simple numbers and making some pretty crude assumptions.
I must confess to number doodling. I get an idea and check a few bits of data out and see what comes out of the number doodling.
It’s not obsessive, my analyst tells me, but I probably do it a bit too much.
Anyway one such doodle (Savings to HM Treasury from one extra home being built.pdf) was to find out roughly how much annual tax and benefit was lost and paid respectively due to a job loss in house building.
By multiplying it by 1.5 you get a figure that broadly equates to the cost to the Treasury of each home not being built in a recession that leads to loss of employment.
The number doodle came up with about £30,000 loss to the Treasury of each home not built.
That suggests, as I have mentioned a few times before, that if you gave £10,000 to someone to who as a result buys a new home the Treasury should be £20,000 better off. It’s one of those lovely quirky paradoxes.
Anyway, I threw that one in at a recent meeting and received the sort of response that the more sensitive among us might take as “you’re a bit weird”. Not that it was criticised.
I did add that I don’t think it is a sensible policy, but sometimes considering mad ideas helps you break free from the confines of convention – or put in language management consultants would understand “think outside the box”.
Well rather than fret over my mental state, I thought I would put it out to a wider audience in the hope that, if I am just being weird, someone will let me know, gently if possible.
So why not give 20,000 “deserving” first-time buyers £10,000 on the basis that all they have to do is buy a new home and live in it for a given period and maybe we will see 20,000 more homes built and 20,000 more first time buyers in the market and £400 million more in the Treasury coffers.
Hell’s teeth, if you want to get all prissy about spending taxpayers’ money, the deal could insist upon repayment of the money when the home is sold – but that does smack of cake and eat it and a distaste for anyone other than yourself getting something for nothing even when you are doing well on the deal.
Okay, I for one don’t think this is a sensible policy, for host of reasons not worth exploring here, but mainly because I think there are far better ways of spending the money to kickstart house building.
But I’d be interested in other views.
One thing it does rather highlight is how some of the HomeBuy schemes look a tad wimpish, don’t you think?
Ps. I’d be more that delighted if someone wants to pull the idea apart – it is after all just the result of a doodle.