To: Alok Sharma,
From: Simon Gerrard
FNAEA PPNAEA MARLA
Managing Director, Martyn Gerrard
DEAR MR SHARMA
To keep our economy strong, drastic policy changes are needed from the Government to support our struggling housing market.
The Government’s housing white paper released earlier this year was titled ‘Fixing our broken housing market’ – but many in the industry felt that the measures announced were ultimately toothless. Whilst it made the right noises, a lack of active and transformative policy means we cannot fight the growing challenges facing our housing market. As the Prime Minister recognised, housing in Britain is wildly unaffordable and a barrier to progress for people in all walks of life.
I meet so many people who cannot afford to move up the ladder – or cannot afford the space they need to live. It is, without doubt, the crisis of our time. Simon Gerrard, Martyn Gerrard.
The average house costs nearly eight times as much as average earnings. It is harder to get a mortgage than ever before and the average age of a first time buyer is getting higher each year. Fewer people own their own home as a result – the number of people living in rented homes has doubled since 2000. Such figures are only likely to rise. I meet so many people at a loss because, either they cannot afford to move up the ladder or they cannot afford the space they need to live – it is without a doubt the crisis of our time.
The public and the industry are facing a failing and broken market. The public needs to be empowered to not just get on the housing ladder but also move up it. The housing market is a cornerstone of the British economy, and with the uncertainty of Brexit it is vital that it remains healthy as a means of providing economic stability. It is therefore more important than ever that Government policy facilitates this.
The way forward
To achieve this stability we need to see an increase in the number of properties available and a rise in the number of property transactions taking place.
I believe there are two policy changes that, combined, will enable this and should be considered by the Government.
We are not producing any more land. At present landowners have no incentive to sell, and much incentive to sit on their land as it accrues value. This means that, despite a housing shortage, there are still swathes of land fit for development across the UK that are not being unlocked. The introduction of a temporary capital gains tax moratorium would provide the push needed for landowners to sell. A huge amount of land could be brought to market, allowing desperately needed homes to be built. It would also bring a brief pause to the ever-increasing price of land, further enabling the construction of more affordable housing for the British people. For those looking to get onto or move up the ladder, there is currently a substantive hurdle in their way – stamp duty. In spite of voter friendly calls from the likes of MP Jacob Rees Mogg, I am not suggesting that stamp duty be scrapped altogether. I am not even campaigning against the extra three per cent in stamp duty for those buying a second home or buy-to-let property.
At present, you pay stamp duty on the home you want to have, not the one you are selling. By reversing stamp duty, and making the tax payable for those selling instead of buying, the Government would be actively encouraging people’s aspirations, not taxing them.
First time buyers would benefit from not paying any stamp duty, yet treasury coffers would be buoyed by revenue from an inevitable increase in transactional volume. I regularly meet families who are stuck in a house unsuited to their needs because the stamp duty involved when moving to a family home is so high, and as a result the market is stagnant.
I appreciate there are other political and financial consequences to consider, not least the issue for downsizers, but having drilled into these I believe they can be addressed and are minimal in comparison to the cost of inaction. I would like to meet with you to discuss how we can make this much needed policy shift a reality. Something has to change. There are millions of families unhappy and struggling day-to-day as a result of current, ineffective policies. The industry and Government must work together to initiate reform in a radical way, or the rhetoric means nothing.
As past-president of the National Association of Estate Agents (naea | propertymark) I understand the challenges presented by the property industry, and can bring contacts from across the property life cycle to inform and expand on my proposals.
This two-pronged approach is a simple solution that will benefit the Government in the long term. I hope to have the opportunity to work with you to make it a reality.
To: The Rt. Hon.
Iain Duncan Smith MP
From: Peter Smith,
Castlegate Estates and Lettings
DEAR MR DUNCAN SMITH,
I thank you for your support of landlords in your article on landlord bashing! Thank God someone is talking sense. It is depressing to think that you might be the only person on the Cabinet who sees the folly of recent government decisions on the PRS.
I am a sales and letting agent in Nottingham, with a management portfolio of 500 rental properties for our landlords and I hold a personal property portfolio of 26 properties built up over the years to look after us in retirement – I am 60.
The Government clearly has an agenda to not only slow down, but stop the PRS, a sector that offers a real service to society, in its tracks. Peter Smith Castlegate Estates, and Lettings.
In the real world things are not good. Private Landlord bashing has been going on for far too long. Margaret Thatcher’s government relaxed tenant rental rules in the ’80s because successive governments have been very poor suppliers of housing, so what’s changed?
I am tired of the constant negative press about rip-off landlords and agents; mainly emanating from London about high fees charged there – not indicative of the rest of the country. All my landlords are honest hard-working people who invested hard-earned cash in property mainly to see them through old age. We are not talking about large corporations.
What’s going on?
Like me many are Conservative supporters, but now, sir, you need to know what’s going on.
If I were in the Cabinet I’d be asking why the party did so poorly in the last general election. I did not vote, neither did my wife, my six children or their partners. I did not encourage them to do so as I had in past years, because the Tory party has abandoned its traditional voters. Why? Because the ‘left’ shouts loudest and the Conservative party is running scared.
Yes, there are rogue agents and landlords. I support proper measures to stamp them out, but why crucify us all for the actions of a few?
I have never asked the state for a penny, always worked hard; when my mortgage business was battered in 2008 because large institutions couldn’t manage themselves and got away with it by successive governments, I started again, setting up a letting agency in 2010.
We ‘have to’ employ 14 people to manage those 500 properties and with the imminent ban on tenant fees the business and 14 jobs are at serious risk. Recent government decisions are clearly being made by people who have no idea of what it takes to run a business. The government wants the industry to ‘up its game’ but is making decisions based on those who-can-shout- loudest-left: Shelter, Generation Rent, CAB to name a few.
Yes, there are rogue landlords and agents. I support proper measures to stamp them out, (who’s asking me?) but most us do a great job in offering good quality, safe housing for tenants, so why crucify us all for the actions of a few?
We are bombarded with right-to-rent, how to rent, section 21, deposit handling, prescribed information, repair handling, gas safety, PAT testing, legionella, on it goes. We have an 86-point checklist that must be followed ‘to the letter’ before we move a tenant into a house. We have to employ people to take calls from clients, pay for cars, petrol, insurance, phones etc. Plus the £44,880 a year it costs us to advertise properties in the first place on Rightmove and Zoopla (I don’t see the government telling them that they cannot increase their charges every year).
And now we’ll have a ban on tenant fees.
The future of lettings
We are set up as a ‘private enterprise’ not government run, although, given recent events I clearly have that wrong.
I have my accountant doing the maths, as are many other landlords, to see if it is worthwhile for me to continue to run my own personal portfolio, housing 26 families – due to your Chancellor’s ‘section 24 decision’. Can you name me one other business that is taxed on its turnover?
Several landlords have already instructed us to sell, two of my properties are for sale and there are likely to be 24 more coming on the market soon, I’ll be passing those families back over to the Government to look after them. When other Landlords realise the full implications of section 24 … look out!
On top of all this, Nottingham Council is to charge Landlords a further fee of up to £600 per property for a licence. This fee will not ensure that property is well maintained, that’s what I already do!
The Government clearly has an agenda to not only slow down, but stop the PRS in its tracks, a sector that offers a real service to society. I cannot see why you are doing all this. I do realise that the ‘shout-loudest-left’ would have a field day with my comments, but you have battered me that much that I am past caring. They won’t shed a tear for me and I won’t shed a tear for them when they have nowhere to live. The only sad satisfaction I will get out of all this is watching the Government struggle even more in trying to find homes for its citizens.