Like many last week, I listened to the Tory Party Conference unsure of what to expect. Despite the coughing, wheezing and P45, there were at least a few glimmers of hope for the housing market.
The promise of 5,000 new council homes was definitely welcomed, as with 4 in 10 people living in sub-standard accommodation, we need to tackle the housing shortfall from all angles. For too long administrations have turned away from social housing; and even though I have spent my working life on the side of buying and selling houses, without a fully-functioning rental market, both private and social, the property market falters – but the impact of only 5,000 new homes will be small.
In terms of the Help to Buy pledge of £10bn, this showed commitment to maintaining a scheme which, if withdrawn could otherwise damage confidence in the critical new build market and first-time buyer affordability space. All-in-all Help to Buy has helped to bolster Britain’s economy and supported people onto the housing ladder. But what I believe may need some consideration is a way of making sure Help to Buy continues to favour first-time buyers first. I am not talking of complicated means-testing, but possibly a simple rule of first-time buyers only or first-time buyers get first refusal. I have already spoken at length regarding the rebranding of Shared Ownership, a topic May didn’t address at the conference, but who knows by the time of the Autumn Budget the government may well be listening!
As we all know, the property market needs to be finely tuned and well balanced in order to keep it moving. We need enough stock available to meet the needs of all its potential buyers, as well as enough demand to absorb the stock. So while Help to Buy has assisted first-time buyers and some second steppers, the case of Britain’s older population who are sitting on billions of pounds worth of equity, is still to be addressed. Some ask for bungalows, others ask for smaller detached homes with gardens, while there are those who prefer the ‘lock-up and go’ ease of flats close to local amenities. Our downsizers are demanding choice – and why shouldn’t they as they are probably in the strongest cash buying position?
If we got this end of the market right, like dominoes, the rest would benefit; stock would be freed-up, second steppers and middle movers would find their family homes and first-time buyers could potentially access the market with less government assistance – meaning that, when the time comes to phase out Help to Buy, the transition would be much smoother.
However, we will have to wait for the Autumn Budget in November to see if the Chancellor has anything to offer on stamp duty concessions or reversing any Buy to Let taxes which do seem to have suppressed landlord/property investor demand already in favour of first time buyers but potentially over cooked the cake?!