Ahead of May’s General Election, the UK’s two largest professional bodies in the property industry have set out a new ‘Housing Manifesto’ to tackle the biggest concerns about the property sector: lack of supply, a need for more regulation in lettings and sales, and appropriate taxes across the whole property spectrum.
Supply and demand
Housing demand from both the sales and private rented sector continues to outstrip supply. For every house built, two households are created. The private rented sector demand is compounded by the fact that an increasing number of ‘accidental’ landlords are leaving the rental market as the sales sector has picked up.
According to ONS data, average house prices have increased by 6.9% since 1980 but compare these to the rental increases during 2014 alone and you will see the difference. Increases were greater in London (2.4%) and the South East (2.1%). Meanwhile, the number of property sales halved between 2006 and 2009 to just 0.86 million and house building fell by 44% between 1980 and 2013/2014.
The National Association of Estate Agents (NAEA) and Association of Residential Letting Agents (ARLA) are recommending better collaboration between regions to ensure planning policy is balanced to meet local housing needs. And with average tenancies lasting between 18 and 24 months, they also call on the government to resist pressure to commit tenants to compulsory three-year leases to give tenants the flexibility they need.
Improve industry regulations
The NAEA and ARLA have highlighted concerns on the UK’s two-tier private rental market comprising those who operate to professional standards and those that don’t. They want to see compulsory membership of the client money protection scheme for letting agents to eliminate risk for landlords, and want regulations to be tightened so that agents who bring the industry into dispute can be removed.
Appropriate property taxes
Increasing housing supply is not a ‘fix all’ solution to our housing issues. Homes that stand empty for long periods are putting strain on demand and are creating a negative impact on local communities. The manifesto pushes for fair property taxes, by empowering local authorities to fine home owners who leave properties sitting empty reforms and reducing VAT on housing renovations and repairs, and improve the quality of housing stock. It also calls for Labour’s proposed Mansion Tax to be abandoned which would damage the pockets of asset-rich but cash-poor home owners.
The manifesto recommends the UK should follow the example of our European neighbours by encouraging institutional investors with incentives to move into the Build to Rent residential property sector. The private rental sector should be treated as an ‘entrepreneurial business activity’ for Capital Gains Tax purposes. This would allow landlords to have the same level of roll-over relief as other businesses when reinvesting in the sector, and limit Capital Gains Tax to gains released from a business as profit.
About the NAEA & ARLA
The NAEA is the UK’s leading professional body for estate agents, whose members are bound by a vigorously enforced Code of Practice and Rules of Conduct, to represent the highest level of integrity and service on property matters. ARLA is the UK’s foremost professional and regulatory body for letting agents, to uphold the highest professional standards and safeguard money through its Client Money Protection Scheme. ARLA licensed agents are professionally qualified and are governed by a strict Code of Practice for ethical conduct, with a robust complaints and disciplinary procedure.
All Martin & Co offices hold Professional Indemnity Insurance (to protect you in the unlikely case of professional negligence), Client Money Protection insurance (to keep your funds and your tenants’ deposit funds safe) and are members of a redress scheme (for peace of mind that any complaints will be independently investigated).