I often speak of my wish to see property taken out of the hands of politicians. Indeed, this is likely to be my battle cry until property really is given the focus and sustained commitment that it requires.
However, with an air of New Year optimism and positivity, I’ve been pondering the impact that recent government policy has had on the UK property market – and it’s not all bad! (It is worth noting, however, that I write this in total isolation of anything Brexit or tenant fee ban-related!)
We all moan about the government (more so now, maybe, than at other times) but, like it or not, under its tenure tangible differences to the UK’s housing landscape and the way the property market operates have been achieved.
Some 30% of all purchases today are made by first-time buyers. Of course, that’s a reflection of how our society has evolved over time, reinforcing the ‘nation of homeowners’ vision, but it is also in no small part, due to government policy.
When the struggles of first-timers wishing to get on the property ladder are so well documented, we’d all do well to remember the impact those policies, including the Stamp Duty exemption and Help to Buy (plus associated Help to Buy ISA and Lifetime ISAs), have had on giving people support as they invest in their first home.
I’m not suggesting that all first-time buyers suddenly now have it easy or that the challenges of becoming a home owner have disappeared. Nor am I suggesting that it is solely the introduction of these initiatives that has made home ownership possible: certainly, some would have made their way on to the property ladder via other means, given time. That doesn’t, however, erase those for whom these incentives have made the difference.
When Help to Buy was first launched, it was not only for first-time buyers, but also for those taking a step up. We mustn’t forget this as it enabled house builders to develop with a level of assurance that purchasers would be incentivised to do exactly that, purchase their homes. Output levels consequently started to increase.
Numerous arguments focus on the fallacies of Help to Buy; its impact on inflating house values and the true value of those homes over the longer term. Similarly, there are arguments around whether housebuilding output is anywhere near the level it needs to be at. Those points aside for now, the fact remains that there are many people enjoying new homes who wouldn’t have without the incentives introduced by government.
So, despite everything, certainly despite shocking headlines, there are some government policies that might just be working: 30% of purchasers are first-timers and the cost of borrowing has reached an all-time low.
However, to creep closer to a position that truly meets the needs of the UK, the government must commit to increasing the supply of social housing and to building in such way as to address more diverse modes of tenure, not least of all Build to Rent.
Perhaps then we’ll have a medium to long-term strategy that will give consumers the choice they need. It still doesn’t, however, mean that government is the right place for these decisions to be pushed forward…Oh, there I go again.
*David Westgate is Group Chief Executive of Andrews Property Group