With the ups and downs of equities, and the realisation that, no matter what, residential property always manages to hold its own, many people opted to invest in a buy-to-let as their pension pot.
This, it seems, upsets the current Chancellor, George Osborne, who seems to have gone to war on buy-to-let investors as individuals but not if they are corporate entities with a huge stock of tenanted housing.
These corporates can claim interest paid on their mortgages against tax and won’t be hit with the three per cent Stamp Duty hike that comes into effect next April for small buy-to-let investors at the same time as their mortgage tax relief starts reducing, along with changes to wear and tear allowances.
Entrepreneurial spirit is OK if it’s on a large scale and if you can take lots of houses out of the stock for sale then you have to be good.
Nibble at the stock piecemeal with a house or two and you become a pariah, preventing hard-pressed first timers from making a purchase. Twisted thinking or what?
Now it seems George is after we traditional estate agents, you know, the ones who don’t charge a fee on a failed sale and get paid only when our job is done.
The Government is planning a consultation launch in the new year with the aim of injecting innovation into the process of home buying, ensuring it is modernised and provides consumers with different – and potentially quicker, simpler and cheaper – ways to buy and sell a home.
It wants to encourage new business models (for example, online-only estate agents) to enhance price competition in the real estate sector.
Government research evidently suggests that consumers lose around £270m each year when their transactions fall through and they have already spent money on legal fees and surveys.
Many more sales are subject to costly delays, claims the Government, but that’s hardly due to high street estate agents, who work like Trojans to get the deal done.
“The government wants to consider and address the way the real estate and conveyancing markets have developed around the existing regulatory frameworks, encourage greater innovation in the conveyancing sector and make the legal process more transparent and efficient.”
“The government will therefore publish a call for evidence in the New Year on home buying, exploring options to deliver better value and make the experience of buying a home more consumer-friendly.”
It all sounds very good, but just how will encouraging online agency help reduce the costs of failed transactions? Many online-only agencies charge their fees upfront, adding to the already high £270m of misery caused by failed sales, when traditional high street agencies probably contribute very little to that total.
What is it with this Government that says it favours home ownership yet does little to genuinely promote it? It tinkers round the edges with schemes to bolster new homes builders when the existing stock could be put to better use.
People wanting to move on up, and free smaller homes to place them for sale, are prevented from doing so by the penalty Stamp Duty applicable to houses costing more than £937,000.
Since Thatcherite policies promoted home ownership, a great many properties have passed that benchmark and become largely unsaleable through market resistance to Osborne’s ill thought out ideology.
Perhaps a U-turn on Stamp Duty is now in order. After all, if it can be done over such a central policy plank as ending tax credits then it must be simple to introduce without feeling shamed. Over to you, George!
*Colin Shairp is director of Fine and Country Southern Hampshire