Since the Conservative Party came to power in 2010, there has been 11 different Housing Ministers
“How can the government solve the housing crisis? For a start, it would be useful to have a Housing Minister in post for more than six months,” according to Louisa Sedgwick, managing director at Hampshire Trust Bank.
Since the Conservative Party came to power in 2010, there has been 11 different Housing Ministers.
Sedgwick went on to ask the question: “Hand on heart – can you name the current minister?”
She added: “What this constant churn does is create inconsistency. Just when we think we are making progress with policy plans, the minister is moved on and replaced by someone else.”
Sedgwick believes the role of Housing Minster is seen by too many politicians as a rather junior position and is often used as a launchpad by the incumbent to ‘greater’ things.
“Keep one’s nose clean for six to 12 months, do not do anything too radical, look competent and you will get promoted,” she said.
However, what she believes is needed for the market is the opposite; she outlined that the market needs someone who is in the post for a good few years and sees the position as of national necessity and not as a means to a career end.
Sedgwick believes this change would go a long way in making some real progress in getting reasonable and effective planning reforms on to the statute book. She does concede that there has been some progress in this regard.
This comes in the form of Secretary of State for Levelling Up, Housing and Communities, Michael Gove seeking to get sensible changes through, often in the face of opposition from his own backbenches, she said.
However, Sedgwick has demanded that more clarity is provided around what has changed as there is too much confusion through the property sector, which is perpetuating indecision.
Finally, further support for last-time buyers is required, according to Sedgwick. Inadequate housing supply for the older generation is causing issues throughout the chain.
She said: “Where are the incentives for developers to build appropriate housing? Builders are not going to provide bungalows unless they are given adequate financial reasons to do so, for example.
“Currently, there is so much focus on first time buyers and so little on last time buyers. Help developers to redress this balance and it will free up housing stock and get things moving.”
In addition, Sedgwick believes that stamp duty also needs to be abolished for last-time buyers, as an incentive for them to move and get the property market’s gears working more effectively.
The current Stamp Duty Land Tax threshold for residential properties is £125,000 in the UK.
As it stands, the amount required in tax rises to 2% for the next £125,000, 5% for the following £675,000, 10% for the next £575,000, and it then caps out at 12% for anything above £1.5 million.
However, during the hight of pandemic, it had been possible to get a discount that meant you would pay less or no tax if you, and anyone else you are buying with, were first-time buyers, or if the purchase price was £500,000 or less.
If you are buying a residential property there are different rates of Stamp Duty Land Tax de-pending on if you are a first-time buyer, you already own a property, and if you are buying an additional property and if you are not a UK resident.
For example, a borrower will have to pay 3% on top of Stamp Duty Land Tax rates if buying a new residential property means they will own more than one.
However, if it takes longer than 36 months to sell the previous main home, then a borrower will be able to get a refund of the extra 3% Stamp Duty Land Tax.
Sedgwick believes that until further attention is given to last time buyers, they will continue to remain in properties far too big for them and that no longer suit their needs, which, in turn, prevents first-time buyers from purchasing the property.
All in all, the system is flawed as there are incentives and support in place for first-time buyers, however the supply is not there because of the lack of support for last time buyers, she suggested.
“These are just a few thoughts on what could be done. Something for Stuart Andrew’s inbox perhaps? Yes, he has been Housing Minister since last month…,” added Sedgwick.
