I friend alerted me to the fact that one of the tabloid newspapers has issued a warning that the buy to let sector may be under attack yet again with the government now considering even more stamp duty on homes purchased to be let out.
James Forsyth, who is the political editor of the Conservative-supporting Spectator magazine, wrote in a guest column in The Sun over the weekend, that this autumn’s Budget may see the introduction of yet more Stamp Duty Land Tax (SDLT), on buy to let purchases.
In April 2016 a three per cent stamp duty surcharge was introduced on additional homes – that is, both buy to lets and holiday homes.
The Sun is not normally a natural source of housing news, but I understand that it has been used rather cleverly by the government in the past to “fly kites” and raise issues to gauge public opinion before the measures are introduced formally – or, in some cases, abandoned.
In addition, I also understand that Mr. Forsyth is known to have influential sources close to government.
his comments include on this particular issue:
- The Treasury is looking for ways to raise money ahead of the Budget this autumn.
- I understand one option being considered is a further increase in the stamp duty rate for buy to let properties.
- This would, so the thinking goes, raise money for the Exchequer and help keep house prices down.
But let’s be honest here, this is not about solving the problem, it is just another cynical attempt to hide the inadequacies of our current parliament. If the Government was serious about helping more people on to the property ladder, as opposed to just raising yet more money from Stamp Duty, then what’s needed is changes to the planning laws to get far more homes built where people want to live and most importantly the first-time buyers’ market and the affordable housing need to be addressed as a priority not as an afterthought. “You cannot build a strong house on a weak foundation” It’s that basic and that simple!
In November of last year, the telegraph announced that the Government had exceeded its target of 200,000 new homes for only the first time since records started in 1992 (and then by only 6530). However, they also identified that only 19% were affordable housing and that is where the real problem lies.
One of the main problems in my opinion, is the Charity Shelter who have been lobbying and advising the government on housing. Although they appear to mean well, so far, they have persuaded the Scottish Parliament to ban tenant fees in Scotland and according to Shelter rents have increased by 2%. If you read my December 2016 Blog you will see the figures I have been quoted from articles using the Office of National statistics and the Scottish equivalent, rents have risen by 15.3% (just look at the difference in rental prices in the article that prove this point irrefutably And yet they continue to advice the current government who are hell bent on causing the same pain for tenants in England next April. In my opinion for cheap political votes until they realise they have been conned.
They are quoted as saying “The housing crisis isn’t about houses – it’s about people. It’s the family struggling to meet next month’s mortgage payment. The young family renting a rundown flat, wondering if they’ll ever be able to afford a home of their own. The children living in temporary accommodation, forced to change schools every time they move. The lack of affordable, decent homes is affecting families across the whole country.” I agree in principle however experience has taught me to look at the potential consequences of your actions, which Shelter has clearly not done or learned from.
Yet they have lobbied the English Government to ban tenant fees next April, which has been proved to increase rents and alienate landlords and tenants. I am all for getting rid of bad landlords, they don’t deserve to make any money from renting indeed if they are as bad as people say they should have their stock confiscated and given to social housing (what a great way that would be to increase affordable housing. However, Shelter has failed to acknowledge that the vast majority of landlords are decent responsible people and these are the ones that they are actually affecting. So, as a direct result of their advice they are in fact forcing the prices of houses up as a consequence! Hardly a model to show compassion or meet the needs of your customers is it? I would suggest the direct opposite.
The guardian in January of this year wrote an article suggesting Builders were deliberately building slowly to keep the housing prices high. Only this week we had on the news and in the Local Government Chronicle (LGC) that new housing on greenbelt land was up 50% on the previous year (2-4%), however the amount of affordable housing was again extremely low. Another source also quoted said
“Up to 460,000 homes are in the works on land released from the green belt – but the percentage of affordable homes is continuing to fall.
The protected rural areas remain under severe pressure, according to a new report from the Campaign to Protect Rural England (CPRE), despite government pledges to protect it.
Moving green belt boundaries during local plan reviews makes it easier for local authorities to release land for housing – despite the move only being intended to occur under exceptional circumstances.”
My advice to the government is simple;
Stop tinkering. Deal with builders the same way as you deal with landlords and deal with them firmly but fairly. Introduce higher quotas of affordable housing and build them into planning permissions to ensure they are adhered to and restrict the time limits on the permissions (i.e. if a schedule is agreed and submitted, the permission is in line with the schedule and cannot be changed without a further permission. Regulate landlords fairly and stop promoting products and services for a few years then beating the hell out of them for the next ten until the market is ruined (Diesel cars, buy to let landlords, retail shopping etc.etc.etc.). Have a long-term cross-party plan that is workable, fair and achieves your aims. You can do it with energy, why not with housing as a whole?
If you have any questions regarding the letting or management of your properties, or wish to know more about the current legal requirements I can normally be contacted at our Durham office on 0192 212 6970 and will be happy to discuss your letting requirements with you.