Property Natter - The long arm of the law that change...

It was a genuine pleasure to read this week about Yorkshire estate agent Ian Bradbury who clocked up 40 years selling houses in and around his home town of Keighley.

For four decades, Ian has worked for Dacre, Son and Hartley, and in that time he’s been involved in around 10,000 transactions.

Inevitably, this got me thinking about the days when young Bradbury entered the industry straight from school.

Liverpool won the League Championship that year and Culture Club topped the singles chart with Karma Chameleon.

Unemployment was on the way down but still stood at 8.2% and inflation stood at 4.59%. The Bank Rate, however, was a whopping 9.06%.

On the political front, in the wake of the Falklands Conflict, Margaret Thatcher won a landslide general election – securing a 144-seat majority over Michael Foot’s beleaguered Labour Party.

Desirable areas

Housing policy was grabbing all the headlines at the time with the second round of Right To Buy legislation extending the scheme introduced by Michael Heseltine in 1980 which enabled council tenants to buy their homes at a discounted price. The move proved so popular that, three years later, the Government introduced a Bill to increase that discount to a maximum of 60% of market value, depending on length of tenancy.

By 1987, more than 1,000,000 council homes had been sold to their tenants.

This may sound a bit like a boring old history lesson, but the ramifications of these measures are still being seen in the market today.

While there is no doubt that tenants benefitted enormously from the policy, speculators were able to buy up council properties through deferred transaction agreements and council housing stock in more desirable areas was significantly diminished. Some critics argue that the move hastened the rise in property costs – particularly in London and the South East.

The move certainly had its detractors but there is no doubt that it changed the shape and structure of housing in Britain and introduced hundreds of thousands of new property owners to the market place.

In fact, as a young Ian Bradbury was learning his trade, another Ian, Housing Minister Ian Gow, was on his feet in the Commons promoting his Bill and in response to criticism from a Labour Member, he said: “Despite his professed wish that power should not be concentrated in a few hands and his professed purpose of extending power to as many free citizens as possible—objectives which are shared by every Conservative Member—the right hon. Gentleman wishes to halt, and, if possible, to reverse, the most fundamental transfer of wealth and property from the state to the people which we have seen in our history.”

Share and share alike

Since those heady days of major reform, we’ve seen a lot of changes in the housing market, the rise in prices, the rise of PropTech and, more recently, the rise in popularity of shared ownership – another Government initiative which allows prospective buyers to purchase up to 75% of a home with as little as a 5% deposit.

So much so, in fact, that one of the sector’s major players, Leaders Romans Group, this week launched SOWN, a new branded division positioned specifically to exploit the growth in this area.

Peter Kavanagh, Leaders Romans CEO said: “Shared ownership is one of the fastest growing sectors within the property industry. It’s one which has been little understood until recently but offers an opportunity to so many. We’re proud to be part of its exponential growth and see the creation of SOWN as an important step in that process.”

This got me thinking about the extent of the desire for home ownership that exists in the UK.

This is what underpins the entire sector, gives it its resilience when challenged by external economic pressures and it’s ability to recover and grow when those pressures eventually relent (as, sooner or later, they always do).

The Government and the market responds by finding more and more creative ways to try to satisfy that demand whether it be Right To Buy, Help to Buy, longer- term mortgages or Shared Ownership.

And, according to Sara Palmer, distribution director at The Mortgage Lender, buyers, too, are consciously moulding their expectations to new market conditions.

She said: “For much of this year mortgage rates have been following the same upwards trajectory of the Bank of England’s base rate, however we could be seeing the start of a shift in the market.

“TML’s research found that some buyers are still planning to go ahead with their purchasing plans, even if it means making compromises along the way to mitigate against rate rises. Of those who are progressing with their homebuying decision despite high interest rates, 27% said they’re buying away from commuter towns for example, while another 24% said they’ll buy a cheaper property that needs renovation work. Others are compromising on outside space (21%) and property types (13%).”

Despite the slings and arrows suffered in recent months, perhaps the property market is ‘safe as houses’, after all.

Until next time.