Dear Kit, thank you for joining us at the RESI Convention in Wales this week. We are delighted that you have chosen to give your first major public address to the sector as housing minister at our event.
Thank you for joining us at the RESI Convention in Wales this week. We are delighted that you have chosen to give your first major public address to the sector as housing minister at our event.
As you couldn’t stay for the whole thing, I have summed up in a letter the key housing issues the government needs to address.
First, there’s the matter of supply. It is great that you’re interested in supporting the build-to-rent market, but what about homes for sale? While BTR advocates maintain rental is a positive lifestyle choice, the reality is that most people would rather not toss up to half their earnings into the rental black hole.
They would like to own their homes, do them up to their own taste, release a bit of equity now and then to help the kids through university, say, and eventually leave something to said kids when they sell up and downsize to something more practical.
The government has talked about backing offsite construction and SMEs; now let’s see it walk the walk – and stop hindering would-be buyers at every turn. Help to Buy has done little more than stimulate demand and drive prices beyond the reach of many first-time buyers.
A rethink on stamp duty would also be much appreciated. As Residential Land’s Emma Whitby-Smith points out, many people can no longer afford to move in Greater London, which is ludicrous. It would be easier to understand if the Treasury take was increasing, but it’s not.
Revenues tumbled 11% year on year in the second quarter of the year, while transactions fell 7%. Have a word with Philip Hammond, would you, and get him to cut stamp duty in the autumn Budget? More people would then be able to afford to buy and the Treasury would see stamp duty revenues resume their upward trajectory.
Could you also do a bit more to help those looking to downsize? A healthy housing market relies on the activity of first- and last-time buyers. If this is stifled, the market grinds to a halt. An easy way to get things moving again is to free up homes being vacated by downsizers for first-time buyers and vice versa.
The will is there in both camps to move, but unfortunately not the way. As our Hot Housing Index compiled by CACI shows, half the top 20 locations with a higher proportion of would-be first-time buyers are in London. However, the ranking does not take into account affordability and the harsh truth is they are unlikely to be able to afford to buy in the capital.
At the other end of the spectrum, data released by Legal & General earlier this year found that 39% of UK homeowners are considering downsizing – up on 32% in 2015 – but half (49%) have not done so because there are no suitable properties available and nearly a third (29%) haven’t because those that are available are too expensive.
It would be great if you could work with the industry to address some of these issues – and if you could stick around for a while in the role!
Anyway, thank you again for coming to RESI. Do let me know if you need any further information and I will put you in contact with the relevant people. I hope to hear from you soon.