NAEA and ARLA launched the 2015 Housing Manifesto at the third consecutive NAEA conference, ‘Agents of Change’ on Tuesday 23rd February 2015. The three key points that came out of the manifesto are discussed below in greater detail:
Supply vs Demand: the primary concern in the manifesto being “tenant demand vastly outstrips housing supply in the private rented sector”. Another interesting point highlighted was that as the sales sector continues to become more buoyant, more landlords are now leaving the rental market; consequently making supply even tighter. Solution: more affordable costs and forward-planning came in as some recommendations to remedy the situation with supply. Raw materials should be ordered a year before a home can be built, skilled workers are needed to ensure properties are built well. Less onerous regulations was also mentioned as costly supply can result in unaffordable housing. It was also suggested that we need to start applying common sense to planning policy and working to ensure that it is not made easier to build in some cities over others. The last answer that was offered for the lack of supply was for governments to resist calls to commit to compulsory three year leases. Research has shown average tenancies last between 18 and 24 months and could provide a disincentive to landlords and tenants who require flexibility to plan their future.
Regulation and Licensing: to destroy the two-tier standard that operates in Britain of those that are operating to a professional standard and those that are not.
Solution: it should be compulsory for lettings agents to be a member of a client money protection scheme; given the large sums of money they hold for tenants and landlords alike. Regulation tightened for the whole industry should ensure greater fairness and hopefully removal of those that bring the industry into disrepute. Finally, the fee question was highlighted here. The manifesto emphasises the need for the Government and all parties concerned to resist imposing an outright ban on lettings agents charging a fee. The fee is said to help ensure a smoother and more transparent transaction between agent, landlord and tenant; and removes the likeliness of higher rent charges, which would otherwise be the case.
Appropriate Property taxes: whilst discussing the issue with supply some attention must also be given to current housing stock. There seems to be large numbers of homes that are lying empty for extended periods of time. This is not only a point-blank frustration for those looking for somewhere to live but can equally also increase the chances of a negative effects spilling over onto the local community. Equally, the manifesto also depicts the problem with punitive taxes. The price of property has shot up in recent years but people’s salaries and living standards are not consistent with this.
Solution: to enable the sector to become more entrepreneurial and encourage institutional investors into the residential property sector. It is portrayed that only 2% of landlords have a portfolio of more than 10 properties. Institutional investment is a method that seemingly works well in other economies such as, Germany and France, and would hopefully help the industry to meet its demand and professionalise further the sector in the UK. Local authorities should be allowed to fine home owners who leave their properties sitting empty and allow this to be done in line with how long the household is left empty. There should be incentives for home and land owners to continue to make improvements to their properties and thus improve the quality of housing stock in general; as well as reductions on VAT housing renovation and repair. The manifesto opposed the introduction of a mansion tax that was described as regressive for asset-rich and cash-poor consumers that would not be able to keep up. Lastly, an important overview the manifesto emphasised was that homes are still as important to Britons as they ever were. Quite rightly everyone believes they have a universal right to a home.
Nonetheless, with statistics illustrated such as: the overall level of house building has declined since 1980, of more than 44%; 140,880 house in 2013/14 compared with 251,820 in 1980. Whereas, house prices have been on an annual rise of 6.9% since 1980. It is undoubtable that the lack of supply is a pressing issue and concern for Britain. The manifesto, having consulted with many stakeholders across the UK, simply asks for the government to take a long-term progressive view on the three main factors aforementioned. Source: THE PROPERTY PROFESSIONALS HOUSING MANIFESTO 2015 Accessed: 02/03/2015
What are your thoughts on the 2015 manifesto? Is there anything else that should have been highlighted?