Oct 27
No UK political party has ever won an election with a manifesto that promises to change nothing. There is always the promise of policy change for a brighter future. So, with our next General Election just around the corner, what do I think the winning party (whoever that is) would and should mean for the property sector?
First, I cannot see either of the big parties making radical promises and changes. Jeremy Hunt and Rachel Reeves are seemingly aligned on many things and talking similar macro reassurance policies. Perhaps this is an after-effect of the Brexit, Covid and Mini Budget earthquakes.
But where should their focus lie?
Taxation & Business Rates
This is a difficult path to tread, although one that needs to be walked. There’s been so much turmoil – or disaster if you think back to Liz Truss’ 49-day tenure as PM – in this area that I suspect we will only see softer policy changes. The link to the Corbyn / McDonnell failed era around taxing property owners over tenants and the other ‘progressive property tax’ ideas, means Labour has returned to more central Blairite policies.
What I do think will be in sharp focus is the high street and its perpetual death by a thousand knives. For a long time now it’s been impossible for retailers to pay overheads, staff, operating costs, and business rates, while competing with online retailers. Perhaps a further unradical and tokenistic softening on high street retailers while increasing tax online is the only way. It’s difficult with an economy showing no signs of GDP growth and increasing expenditure – no party wants to risk increased borrowing levels and spooking the markets - but there needs to be a long overdue rebalance.
The High Street
The narrative around the UK high street hasn’t changed that much. We’re seeing retail continue to shrink in town centres, which is fine and part of retailing’s ongoing structural change. That space should be repurposed with thought. After all, they have great infrastructure - public transport, access to major highways and services, etc. So why not introduce policies that incentivise investors to create homes out of those vacant buildings? And encourage local authorities to push ahead with more radical ideas – like Stockport, which was rumoured to be putting a major hospital right in the centre and bring a completely new dimension to the area.
Buy To Let
Buy-to-let has been the whipping boy in recent years with increased taxation and regulations in this sector, which has gone too far, as seen by the recent relaxation of EPC requirements. Labour did suggest more change would be afoot too, with a rent cap. However, this type of socialist policy has only recently been dismissed with the realisation that this would only increase homelessness.
What their policies should be focusing on is the reverse. There is not enough rental property to meet demand, hence rent levels continue to go up. So, reverse the trend by making it more attractive for BTL landlords to enter / remain in the market and increase supply to reduce costs. That way we will achieve more of an equilibrium, which will benefit both renters and (more) BTL landlords in the long run.
Housing and Social Care
Social care and necessary changes to it can’t be ignored by the next government. We have an aging population that needs supported living. And this is going to increase.
The main way to create more homes for supported living is via private investment. This could be an area of significant growth. But it’s always been a problem - that fight between the centre and local government / planning authorities.
It’s easy to say, ‘we need 300,000 new homes each year’, but local authorities and planning authorities don’t want green space redesignated from greenbelt to housing. Successive governments on both sides have found it difficult to overcome this. Perhaps the solution lies in repurposing town centres as I mentioned. Either way, you need to generate private investment and the only way to get that is via tax incentives.
So where does this leave us? In the months ahead, a lot will be discussed by both parties, but I think it will be a more dull than interesting watch. While I don’t think either party will push radical policies for the property sector, it presents a fortuitous opportunity for cross-party policies to address fundamental problems and promote effective policies. I just hope they’re not arbitrary targets and promises – one can only hope.
But where should their focus lie?
Taxation & Business Rates
This is a difficult path to tread, although one that needs to be walked. There’s been so much turmoil – or disaster if you think back to Liz Truss’ 49-day tenure as PM – in this area that I suspect we will only see softer policy changes. The link to the Corbyn / McDonnell failed era around taxing property owners over tenants and the other ‘progressive property tax’ ideas, means Labour has returned to more central Blairite policies.
What I do think will be in sharp focus is the high street and its perpetual death by a thousand knives. For a long time now it’s been impossible for retailers to pay overheads, staff, operating costs, and business rates, while competing with online retailers. Perhaps a further unradical and tokenistic softening on high street retailers while increasing tax online is the only way. It’s difficult with an economy showing no signs of GDP growth and increasing expenditure – no party wants to risk increased borrowing levels and spooking the markets - but there needs to be a long overdue rebalance.
The High Street
The narrative around the UK high street hasn’t changed that much. We’re seeing retail continue to shrink in town centres, which is fine and part of retailing’s ongoing structural change. That space should be repurposed with thought. After all, they have great infrastructure - public transport, access to major highways and services, etc. So why not introduce policies that incentivise investors to create homes out of those vacant buildings? And encourage local authorities to push ahead with more radical ideas – like Stockport, which was rumoured to be putting a major hospital right in the centre and bring a completely new dimension to the area.
Buy To Let
Buy-to-let has been the whipping boy in recent years with increased taxation and regulations in this sector, which has gone too far, as seen by the recent relaxation of EPC requirements. Labour did suggest more change would be afoot too, with a rent cap. However, this type of socialist policy has only recently been dismissed with the realisation that this would only increase homelessness.
What their policies should be focusing on is the reverse. There is not enough rental property to meet demand, hence rent levels continue to go up. So, reverse the trend by making it more attractive for BTL landlords to enter / remain in the market and increase supply to reduce costs. That way we will achieve more of an equilibrium, which will benefit both renters and (more) BTL landlords in the long run.
Housing and Social Care
Social care and necessary changes to it can’t be ignored by the next government. We have an aging population that needs supported living. And this is going to increase.
The main way to create more homes for supported living is via private investment. This could be an area of significant growth. But it’s always been a problem - that fight between the centre and local government / planning authorities.
It’s easy to say, ‘we need 300,000 new homes each year’, but local authorities and planning authorities don’t want green space redesignated from greenbelt to housing. Successive governments on both sides have found it difficult to overcome this. Perhaps the solution lies in repurposing town centres as I mentioned. Either way, you need to generate private investment and the only way to get that is via tax incentives.
So where does this leave us? In the months ahead, a lot will be discussed by both parties, but I think it will be a more dull than interesting watch. While I don’t think either party will push radical policies for the property sector, it presents a fortuitous opportunity for cross-party policies to address fundamental problems and promote effective policies. I just hope they’re not arbitrary targets and promises – one can only hope.
James Staveley MRICS, Evaluate Chartered Surveyors