We are delighted to have a guest blog from none-other than Ed Mead, Executive Director of Douglas & Gordon and a man who knows literally everything there is to know about London property. Here he looks at the latest changes in the Chancellors Autumn Statement.
In 2013 the English Housing Survey discovered that the private rented sector was bigger than the assisted – 4m in the former and 3.7m the latter.
Some seek to imply that as house prices have gone up many have been forced to rent and tagged as failures off the back of it. Well, let’s look at house prices in the UK which are, right now, about the same nominally as they were at the back end of 2007, so hardly skyrocketing then.
Ignore London’s different recent path, hyperbole for which is occasionally deserved, as it is a result of it being the World’s no. 1 destination – hardly something we should be embarrassed about.
So for many in the UK renting is hardly a choice but shouldn’t be seen as a handicap. Given the Chancellor’s Autumn Statement the lot of the tenant in the private rented sector is about to get tougher.
Looking for a reason why is to delve into the fear this [and any other] Government has of being cast as siding with a publically vilified villain. Add to this the pressure HMG seems to heap on itself to turn the population into homeowners and you can possibly, if you squint, see why they’d want to be seen to help first time buyers.
Somehow they seem to have believed those misguided groups seeking to tag all private rental sector landlords as clones of Nicholas Van Hoogstraten [look him up – he’s old school]. Most PRS landlords own one or two properties, care about them passionately and manage them well. Loud and opinionated lobby groups seek to tarnish all with the same reputation the very few bad apples have caused and stupidly the Chancellor has listened to them.
Their absurd use of SDLT as some sort of blunt reaper drone to control demand not only seems to value landlords ability to buy property at 3% more than a first time buyer’s but if you add the upcoming withdrawal of mortgage interest relief for landlords creates the obvious corollary that many will leave the sector putting rents for aforementioned tenants UP as supply diminishes.
The two assertions in the last paragraph alone should render the Chancellor’s changes flaccid at best and chemical castrating at worst. All this made worse when what we actually need right now is more Viagra for this market, not less.
Our evidence is already showing many wanting to exit this vital investment area, and given the ongoing low interest rate environment they have little prospect of giving their money and retirement much of a boost as a result. They certainly won’t be supplying the market with property.
Why do the Government refuse to look at sensible and well thought out large new “build to rent” schemes such as those that exist in Germany? They provide long-term security in safe environments and have not fuelled an over the top property investment mentality that has seen many German citizens continuing to invest in companies rather than properties – surely a healthier long term option.
Come on George, please start looking at the supply side of rentals, as much as ownership, and stop weaponising SDLT as a means of restricting demand.
Every time you tinker with and raise SDLT a little bit of the market dies.