Stamp duty cuts and a planning overhaul: Estate agents tell us their housing policy wish list
With Simon Clarke announced as the new housing minister, we asked top estate agents for their housing policy wish lists
Simon Tollit, Partner, Tedworth Property
Operating in the luxury residential sector of Prime Central London, the last two years have seen a strong domestic market and more recently London has welcomed back international investors. However, with a large number of discretionary transactions, our market doesn’t react well to political and economic uncertainty.
With inflation at levels not seen for 30 years, we would like to see Liz Truss arrive at Number 10 with a decisive, robust and well thought out housing policy plan to deal with the ongoing issue. With the BoE’s recent predictions of an impending recession, this alone is enough to dampen sentiment and cause hesitation within the housing market, so a well thought out control strategy is key to providing the stability we need and allow those wishing to make a move the confidence to do so.
We would like to see two things from the new Housing Minister. Firstly, to introduce measures to expedite and protect the sales process both for buyer and seller, by ensuring all stakeholders are obliged to provide all necessary information within a fixed time period.
Secondly following the tragedy of Grenfell, the ongoing issue of ensuring residential buildings are safe (and saleable) needs rectifying urgently. It is not right that millions of people are unable to sell their homes through no fault of their own and this should be at the top of the new minster’s ‘to do’ list.
Ben Horne, Head of Country Buying, Middleton Advisors
I would like to see an overhaul of the conveyancing process, starting with offers becoming legally binding.
This would remove unnecessary costs, endless uncertainty for both buyer and seller, gazumping and everything that makes moving house utterly miserable. I recently had a client who spent £27,000 on the process only for the vendor to change their mind at the point of exchange and not sell.
Marc Schneiderman, Director, Arlington Residential
My firm is really wishing for a lowering of SDLT rates. As recently as 20 years ago the highest rate of Stamp Duty was two per cent. Now it is 12 per cent plus an extra two per cent if you are an overseas buyer and an additional three per cent if you own a property anywhere else in the world.
The Government has benefitted from huge increases in revenue from SDLT as property values have soared in the last 20 years. So not only are they now taxing up to eight times what they were 20 years ago, they are also levying this tax on values that have quadrupled – a house that sold for £2m in 1998 would have paid £40,000 in SDLT. That same house today, which is selling for £8m, is paying 15 per cent (assuming buyer owns a second property), which is £1.2m. Totally preposterous and unjust.
The increases in SDLT stalled the market and have taken a great many people out of the market to move.
When there was a SDLT ‘holiday’ during the pandemic, there were huge increases in the levels of activity and property sales. This should demonstrate the extent to which SDLT has affected the sales market and any reduction in this tax would generate a swathe of sales, providing work for all sorts of trades people, surveyors, architects and the like.
Andrew Deverell-Smith, CEO and Founder, deverellsmith
With the latest round of political shuffling complete, the first thing that’s likely to give the market confidence is continuity. Ten housing ministers have taken office in the last 10 years. It is very difficult to plan and implement significant housing policy improvements with such a short average tenure. We would therefore like to see some consistency in this critical role for the next few years.
The land acquisition and subsequent planning process can leave vast areas undeveloped for years. With a universal acceptance that more properties need to be built than the 165,000 a year we are seeing, it would benefit the market and its consumers if there were processes in place that sped up the level of development.
To allow this to happen I would like to see quality finance packages made available for developers and simpler planning rules.
Inevitably if these challenges can be overcome there will be a question over the physical resources to carry out the work. The construction sector has seen significant challenges since Brexit, which has hindered developers’ ability to access talent. On the face of it there may only be two real options: push the wage level up to create a greater incentive for UK workers or create a special dispensation to allow migrant workers back into the sector.
Sadly, one fix without the other will fail to have a meaningful impact on the economy or the volume of stock badly needed by the UK population.
Jack Reid, Founder and Joint Managing director, Orlando Reid
Over the last few years under the Conservative government, there seems to have been a concerted effort to make it harder to be a landlord. This has been done through the introduction of housing policy such as the second home stamp duty introduced in 2016, the removal of tax relief for landlords on costs such as their mortgage and the tenancy fee ban of June 2019.
With just these three examples, it is clear that the government has been trying to make it harder for landlords to enter the market in order to help first time buyers get on the housing ladder. However, from what we have seen, the main impact has been rising prices for tenants. As landlords quit the market, the amount of housing supply decreases, pushing up prices.
Over the last 12 months, in areas around South West London, rents on some properties have increased by as much as 20 per cent and tenants have been forced to pay above the asking price to beat the competition.
The government needs to encourage landlords to return to the market in the short- to medium-term to help stabilise the market.
The current rate of price growth in the lettings market in London is the highest I have seen for a decade and needs to be looked at by the incoming housing minister Simon Clarke. He should make it easier and more cost effective to be a landlord over the next five years. This will also benefit tenants and normalise rental prices during a difficult time when it comes to household bills and the rate of inflation.
He should also consider reversing housing policy such as reintroducing tax relief on mortgages and reducing stamp duty on second homes.