They will also be disproportionately affected by the government’s decision to end the £20-a-week uplift in Universal Credit from the end of September.
But there is also a deeper point here that connects to trends seen since the financial crisis whereby austerity and cuts in benefits were justified in the name of keeping interest rates low, and those low rates made mortgages cheaper but house prices more expensive for anyone who did not already own.
“Adjusted for inflation, household wealth has more than doubled since 1980 but revenue raised by taxes on wealth has stayed roughly the same – so the tax rate on wealth has effectively halved”
As the Resolution Foundation points out, this represents a powerful additional argument for keeping the Universal Credit uplift (aka returning it to more like the levels originally intended before the Treasury got its hands on it).
At the other end of the scale, the report also provides food for thought for anyone in the government trying to work out what on earth ‘levelling up’ means. With the exception of London, rising house prices have disproportionately benefited the South East and South West over the North and Midlands.
Finally, as state support for the economy starts to be withdrawn and the Treasury looks for ways to restore the public finances, all this raises a whole series of questions about who should be picking up the bill.
Adjusted for inflation, household wealth has more than doubled since 1980 but revenue raised by taxes on wealth has stayed roughly the same – so the tax rate on wealth has effectively halved.
Reform of our creaking and illogical system of property taxation enjoys support across the political spectrum, most recently by the right-leaning thinktank Bright Blue, but it still seems a step too far for politicians in power.
On the evidence so far, though, the burden is most likely to fall precisely on those who have missed out on rising wealth during the pandemic.
Jules Birch, columnist, Inside Housing