Now's not the time to meddle
Leave the property markets alone and watch the improvement
Here's an idea: leave the property market alone and watch the improvements.
Chancellors from political parties of all colours have always interfered in property, creating schemes for at least the last 30 years. One problem is a lack of consistency, another is that they are not needed.
Stamp Duty has increased over the years, then it has decreased. Mortgages have benefitted from subsidies, suffered punishment and then been controlled by different chancellors. Landlords have received help through tax breaks then been beaten with the regulation stick. It's like getting stuck going round and round the M25!
Rishi Sunak, the current chancellor, has recently launched a new guaranteed mortgages scheme. Borrow up to £600,000 and get a 95% loan with state backing, reducing the risk of default to the lender. There is some sense in this, as raising the deposit for one's first home is difficult. Saving £15,000 with a 95% loan allows the purchase of a £300,000 home and, once on the property ladder, staying there is much easier.
Yet markets are already vibrant. Rightmove reports that the UK average house price is at its all-time high of £327,000, up £6,700 in March 2021 alone. At the same time, the number of homes for sale is at an all-time low. A quarter of all properties up for sale are selling in one week, so now is not the right time to be using public funds on the property market!
At the same time, the whole property market is changing rapidly. Planning regulations are being relaxed, plus, COVID has changed the way we live. It looks very unlikely that things will return to the way they were pre-pandemic, with many people now working from home some of the week. The result is lots of empty apartments, as people are desiring more space at home and a garden.
Given the changing face of retail and housing needs, how long before retail parks feel the pressure? We may find the idea of living in a Halford's building strange, but a generation ago the same was true of warehouses along our canals and rivers. Now, apartments in former industrial buildings fetch eye-watering asking prices. Add the amount of surplus office space and changes are coming, and coming fast. An office block under construction in Canary Wharf is being reinvented as housing, a trend that's sure to continue. It's only a case of working out how to turn a workplace into a fun place to live.
These are encouraging developments that excite us. For too long, the UK has built too few homes, and the ones that have been built are too small. People working from home a few days each week are going to need even bigger homes. Seeing a vast amount of new housing would be wonderful, and the surplus of offices and shops will provide the means for this to happen.
All these factors are going to change the property market. We will see changes that are impossible to forecast., so now is not the time for meddling in property by politicians.
When left to its own devices, the property market has a way of providing for society's needs, whilst at the same time it is a major driver of the economy. It's time for the government to try something genuinely radical: leave the property market alone and watch the improvements.