It’s a Tough Time to sell a House in London
It is tough out there in the world of property, thanks partly to this Chancellor, partly to George Osborne and finally to Brexit and uncertainty. The bizarre set of measures used by successive Conservative, yes Conservative governments to cool the market, seem counterintuitive
Article by Elizabeth Moore
We saw nothing in the 2015 manifesto to even hint at the three per cent surcharge on Stamp Duty before it happened, neither did the Conservatives get returned on a pledge to remove tax relief on mortgage interest for buy to let investors. It seems like muddled thinking, wanting to be a government which acknowledges that the top ten percent of tax payers pay 80 per cent of all the tax revenue, but then clobbering them in an already stretched property market. Not all top rate taxpayers own more than one property I hear you cry, but most of them do, and this is money that has already been taxed once when it was earned, will be taxed again when they die, and is taxed when they buy and sell houses. It is as if the Tories spend their time inventing policies to alienate their core voters just in case they look like the nasty party again, favouring the rich and giving tax breaks to entrepreneurs.
It seems to me that the government will have to think again. If London is the engine house of the British economy, with its 1.9 trillion pound property market worth the same as the next nine biggest British cities combined, then the stagnation at the moment is a disaster which happened some time ago, and is only just starting to filter into public consciousness. Land Registry figures take a while to make it onto Sky News and Brexit is muddying the waters, taking the blame as it is for all market instability. The problem is bigger than Brexit. The mentality that a man’s home is his castle has been enshrined in our national psyche for generations, but there has been a sea shift while we carry on regardless.
I have a friend who owns three London restaurants and has a workforce of 60. He is the only person in his whole organisation with a mortgage. The generation that are unable to raise deposits without help from mum and dad are reinforced by their peers and none of them own houses. It doesn’t take much to see that if you would rather use your hard earned cash to go skiing up a mountain in Canada and are part of the first generation that does not feel compelled to save and repeat the example of their parents as it doesn’t seem to have worked out that well for them, then the housing market as we know it is in real trouble.
Perhaps we will move to a European model where lifetime tenancies and professional landlords with lots of properties are the norm, it has happened already in Scotland, but if we are going to embrace this new way of living, we need to support private landlords, quickly – and decisively. Once people get used to not moving, while we all stand still like rabbits in the headlights waiting for M. Barnier to bestow his will upon us, and Mrs May to attempt the impossible task of pleasing all the people all the time, the property sector is in real trouble.
Indecision is the enemy of the property market, and estate agents and property investors across the country will be praying in unison that the Government pulls a decision on Brexit out of its hat sharpish, decides whether it is for or against private landlords, and injects some real cash into supporting the market. Help to Buy is a wonderful initiative but it is not enough to encourage first time buyers without supporting a buoyant market of buyers, sellers and landlords. There is an expression in the property business, that sometimes the best thing to do with property is nothing. Nothing has been happening for a very long time now, and we can only hope that with the shoots of spring, come some injections of energy to get the market moving.