Housing crisis? Industry senior says he’s seen it all before

On reaching his 50th anniversary with the company Winkworth chairman Simon Agace (right) has issued a warning to the new Labour Government saying: “Don’t repeat the mistakes of the past”.

When he took over the firm back in 1974 Agace says it was a very similar picture to today – a serious housing shortage, rental homes in a bad state of disrepair, strikes blighting the Capital and high interest rates.

 There were rent controls and low rents didn’t cover the management of the building so no repairs were done.”

“There were rent controls and low rents didn’t cover the management of the building so no repairs were done.

“It was a mess. London was pretty grim then, with blackened, decaying buildings as there were no smoke controls. It was a very different place.”

It was though also a time of change: “Two things happened. Entrepreneurs realised there was an opportunity and bought up these dilapidated buildings cheaply, sometimes at 45 per cent of value, from institutions who were facing reputational damage and corporates who were under pressure from banks to sell up.

“The new buyers modernised the buildings, cleaned them and tidied up the common parts and then offered them to tenants to buy their flats, often with up to 30% discount.”

And it was new legislation that really freed up the market, with the 1988 Housing Act introducing more flexible assured shorthold tenancies.

“Suddenly you had two classes of rental property,” says Agace.

Appealing to investors

“One where you can negotiate open market rents which made it appealing to investors, and the others still fixed by rent control which have slowly disappeared over the years. There are still people living in low rent-controlled flats in central London.”

“The second change was an influx of international money because of the oil crisis and the change of wealth across the world. We had Iranians, Malaysians, and people from Bahrain, South Africa, and Hong Kong.

“London became the family office centre of the world and the centre of the business world. If you had a business in Bahrain or Abu Dhabi, or wherever, you also had a family office in London.”

It’s why Agace warns the Government not to drive non-doms out of the UK with punitive taxes, saying: “It’s very dangerous to suddenly turn around to people and say, ‘Oh, you’ve got your office in London for the world but now you can’t do it. We’re going to tax you out. So terrifying.”

Picture: Former Times property editor Anne Ashworth, Winkworth chief executive Dominic Agace and chairman Simon Agace.