How To Boost UK’s Ailing Housing Market
The UK housing market has been squeezed to such a level that many are now waiting for it to crash down around us. Excessive red tape, failed government policies and a “too little too late” building plan has come to a head and we have a situation where there is now a shortage of rental homes (which is forcing rents upwards), new build homes being offered for sale at record high prices while re-sale home prices are being pushed further downward given lack of confidence arising from Brexit dithering and a halt in labour mobility.
We at WitLet have discussed various options that could be implemented in order to re-vitalise the market and try and reinvigorate this major part of the UK economy:
- “Generation Stuck” is a relatively new term that has come to the forefront of media. Basically, it is older people who have bought a large family home who, basically, no longer need such a big property and are looking to downsize. So, what’s the problem here? Well, in a nutshell, the question is where can they go? A survey conducted by YouGov stated 70%, agreed, saying there should be more focus on improving the range of housing options for older people BUT only some 162,000 retirement properties have ever been built in the UK! Providing not only “Starter” homes but also “Later” homes or “Later” Communities would be a good starting point and allow desirable property onto the market
- Stamp Duty is relative the sold price of the house. The good news is if you are a first-time buyer, you pay no stamp duty of the first £300k and only 5% on any amount between £300k – £500k. That’s all good given, according to Halifax, first time buyers account for 51% of home buyers taking out a mortgage (up from 38% 10 years ago)! But this is where the good news ends! As values are forever increasing, stamp duty is also going up and up and up! Furthermore, anyone aspiring to second home ownership is penalised with a stamp duty surcharge while moving up the housing ladder is much harder than owning your first home! Boris Johnson wrote in his column last week: “…freezing whole chains of purchase as people are deterred from trading up, with the result that older people are staying in houses that are too big for their needs and younger families don’t get a look-in”. Why not scrap stamp duty and remove the surcharge? Even if only temporary, this will give the market a massive boost while also bringing in fresh rental stock to supress escalating rental prices.
- Cut the red tape and encourage innovation. Is it not time that a #PropTech innovation came along to make the whole property purchase system far more streamlined, efficient, less complicated and easier to use? What about the taxation system for landlords (which is TOTALLY UNIQUE TO ANY OTHER TAX IN THE UK) being returned to normal which would prevent landlords leaving the market (which in turn hikes up rents)? There are plenty of ways to bring the whole house purchasing process into the 21st Century so some encouragement and/or relaxing of current regulation to allow this is what is in order might just be what is needed. Any combination of the above would surely entice more back to property and re-invigorate the market.
Here at WitLet, we are always thinking of the property market and how we could be of assistance. Why not contact us for some FREE, no obligation advice on 0137652450 if you are considering moving and we can look at the options available to you.