If the government’s answer to the housing crisis is to raise the thresholds at which some homebuyers pay stamp duty (SDLT), they are not asking the right question. Tinkering with stamp duty rates will do nothing to resolve the fundamental problem in our broken housing system: the lack of social and genuinely affordable housing.

Further increasing the demand for housing without an accompanying increase in the stock of housing – particularly social and affordable housing – will almost certainly contribute to increasing prices, subject to the significant impact that rapidly rising interest rates will have. By the time the then chancellor, Rishi Sunak’s, first SDLT holiday ended in June 2021, ONS statistics show that prices had risen 12.2% from when the scheme was introduced in July 2020. The £4,200 stamp duty saving on the average £284,000 property sale in England was far outweighed by the average rise in prices over the same period (£30,785).

The availability and affordability of housing clearly is not ministers’ priority. And this policy comes at a significant cost to the Treasury over £7bn in lost revenue over the next five years. Ministers are gambling that any benefits to the property industry will eventually trickle down to the rest of us.

This is a deeply concerning sign that this new administration understands housing only as a means to economic growth, rather than it primarily being the ​‘first of the social services’ (as the 1951 Conservative manifesto described housing) and the foundation on which people build their lives and put down roots in communities. These stamp duty cuts are simply the wrong priority, particularly with interest rates forecasted to soar and homeowners likely to face huge challenges to meet their mortgage payments, with many being unable to do so. Further rent increases, as landlords pass this on to their tenants, and the cost of living crisis will likely result in an increase in the 20,000 households who were made homeless by their landlord last year.

The reality is that it will be those with the most housing wealth in the most expensive parts of the country – primarily in London and the south-east – who will benefit the most, as they can now expect to sell their properties for more because of this announcement. Most first time buyers outside of London buy their first home for under £300,000; the capital was the only UK region in 2021 in which the average cost of a first time property exceeded this figure. The overwhelming majority of first time buyers outside London will therefore not feel any benefit from last week’s announcement and will likely only face further affordability challenges as mortgages become harder to obtain.

Even if we take at face value the government’s primary aim of increasing the number of property transactions, tinkering with stamp duty thresholds is not the most effective way to do this. This is for the obvious reason that stamp duty is a tax on those transactions, and so its very existence acts as a barrier in the system. Moreover, it is unjust, as it imposes (often very significant) charges on those who have struggled to buy their own home because of rising prices over recent decades. At the same time, for instance, buy-to-let landlords incur no stamp duty costs when selling a property in their portfolio, enjoying (save for limited capital gains liabilities) near unfettered benefit from years of increasing rents and rising property prices.

Serious options exist for introducing a more efficient and fairer property taxation system. One, suggested by IPPR, is for stamp duty to be abolished alongside council tax – which is arguably even more regressive than SDLT – and replaced with a property tax, levied on owners and landlords (not tenants). This would better address regional wealth inequalities of which housing is a key driver. Wholesale reform to our property tax system is no small job, but if ministers are as averse to what they describe as ​‘Treasury Orthodoxy’ as they say they are, these are questions that they should be seriously considering.

Instead of tinkering with the thresholds of this fundamentally flawed and unjust tax, the most important step the chancellor could have taken to fix our broken housing system would have been to make it easier for local authorities and housing associations to create the social and affordable housing the country so desperately needs. This would reduce council waiting lists and provide much needed safe, secure housing for the most vulnerable in our society, simultaneously easing the pressure on the private rented sector. Subsequent decreased rents would allow tenants to save more, and the departure of some landlords from the market would increase the affordability of housing.

This week the opposition threw down the gauntlet to the government and told us their mantra will be ​‘council housing, council housing, council housing’. But as we wait for this administration’s broader housing policies, these cuts to stamp duty and the likely ditching of affordable housing provision in the proposed ​‘investment zones’ do not bode well for hopes that ministers will address the fundamental problem in our housing system: the chronic lack of social and affordable housing.