Is the UK housing market broken?
With the publication of a white paper last month, entitled “Fixing our broken housing market”, the Government clearly thinks so. But if you’re a landlord or looking to buy a property, what does that actually mean to you and what can you do about it?
The white paper itself is 106 pages long but Government policy is contained within just 60 of those pages. Having recently been asked to give a presentation on the subject and to save you the trouble of wading through, here’s my at a glance guide and view on the report:
The Government recognises the urgent need for housing and a need to be more inventive in making housing available now and more supportive (both financially and practically) of those trying to find homes.
Looking to buy but struggling?
The Government will continue to assist first time buyers. The help available will be in the following form:
- ISAs to support saving for a deposit
- Help to Buy ISAs with a 20% discount for five years, allowing you to purchase with a 5% deposit
- Rent to Buy, meaning rent at a 20% discount to help save for a deposit
- Shared ownership, buying a 25% or more share of a property
There will be continued efforts to crack down on empty homes and support areas most affected by second homes. And the Government has said they will look at the buying / selling process to see if it can be improved.
Are you a landlord or tenant?
Standards in the private rented sector remain below those in the social and owner-occupied sectors, but are improving: just 28% of homes are now non-decent compared to 37% in 2010. (A property is non-decent if it fails to meet a set minimum statutory requirement. Factors to be taken into account when deciding if a property is “decent” include level of thermal comfort, the state of repair and whether the facilities are reasonably modern.)
The Government is going to encourage institutional investment in the private rented sector, helping to deliver approximately 15,000 new homes for rent. There are currently 54,000 in the pipeline.
The aim is to make renting fairer for tenants and to promote transparency. That includes the growing number of leaseholders (there are around 4 million leasehold homes in England).
Renters often face upfront costs including fees charged by letting agents to tenants and tenants often have no control over these fees because the agent is appointed by and works for the landlord.
To combat this the Government has already introduced transparency in respect of fees and are going to consult early this year, ahead of bringing forward legislation as soon as Parliamentary time allows, to ban letting agent fees to tenants. This should improve competition in the market and give renters greater clarity and control over what they pay.
Safety and standards
The Government will also continue to try to drive up safety and standards in the private rented sector and drive out rogue landlords.
In the white paper, the Government repeated its intention to implement measures introduced in the Housing and Planning Act 2016, which will introduce banning orders to remove the worst landlords or agents from operating and enable local councils to issue fines as well as prosecute. But we’re still waiting for details.
Other measures may include making electrical safety checks for rented properties and client money protection for letting agents mandatory. An announcement on this is expected soon.
Finally, the Government also plans to extend mandatory licensing of Houses in Multiple Occupation (HMOs) which will ensure greater protection for thousands of vulnerable tenants.
Family friendly private rented sector
According to a Shelter report last year, an estimated 65,000 families say that they were forced to move their child’s school the last time they moved within the private rented sector. The predominant use of 6 and 12-month contracts can mean that families who are renting need to move home before they had planned, and that’s alongside the uncertainty and costs associated with taking on a new rental property.
In light of this, it has become the Government’s intention to make the private rented sector more family-friendly by taking steps to promote longer tenancies for new build rental homes.
You’ll find the full white paper report here but I’ll keep you up to date with any developments.
Graham Faulkner is Branch Director of EweMove Dorking and he’s also a portfolio landlord, as well as specialising in helping other landlords. Apart from his own experience and expertise, he can also recommend the right professionals, as tried and tested by him, to advise you.
Multi award winning EweMove in Dorking is a residential property sales and lettings agency who pride themselves on being refreshingly different and standing out from the crowd. EweMove Dorking covers from Ockley to Oxshott.
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