The Residential Expert - December 2022
With 2022 coming to a close, it's time for JMI ambassador and industry guru Mark Hayward to reflect on the year and discuss recent property news. Find out what he's got to say in our Christmas edition of The Residential Expert.
It’s time for the Christmas edition of our Residential Expert discussion with Just Move In ambassador, Mark Hayward. Are we full of Christmas cheer or down in the December dumps? Find out below as we chew the festive property fat, look back on the year that was, and discuss what might be top of the sector’s Christmas wish list…
JMI: How are you, Mark? It’s cold outside so I hope you’re wrapped up warm.
Mark: Yes, it’s absolutely bitter outside. But thankfully I’m all cosy in a small room watching my smart meter monitor my energy expenditure.
JMI: That’s definitely a smart option. Let’s begin by discussing the economic climate. What did you make of the Autumn Statement?
Mark: Well, it was a few weeks ago now but we haven’t talked since. Overall, it was a good stabiliser, which we desperately needed. The flip side, however, is that there wasn’t really much there for the property sector.
We’ll now have to wait and see if we get some much-needed political stability, too. Sadly, the government is currently finding it difficult to pass anything that’s slightly controversial through parliament. The target for new homes, for example, has now been watered down.
JMI: Yes, this was disappointing news. Apparently the much-quoted 300,000 figure is now a ‘starting point’ and advisory rather than mandatory.
Mark: The problem is that it’s incredibly hard to build new homes in areas where people actually want to live. Planning is also difficult and can take two years (for larger developments) before a spade actually goes into the ground. So the government really has to look ahead to solve this problem.
Building more homes is, obviously, a great aspiration. But there are so many problems - not least the support of local councils and MPs. The latter is where the government is currently struggling due to a backbench revolt. It doesn’t help that there’s a shortage of available rental homes, too.
JMI: Maybe it’s time we looked for other solutions then? What about renovating more dilapidated homes or increasing taxes for long-term unoccupied properties?
England currently has a quarter of a million unoccupied properties, and these are ‘homes’ rather than wrecks, so doing something there would definitely make sense. Perhaps their owners could somehow be encouraged to open them up? After all, these properties are simply empty and doing nothing.
One option is to put up taxes to encourage owners to sell or rent them out. In the West Country, for example, there are proposals to double council tax for empty homes. However, if you’re affluent enough to afford two homes in the first place then a council tax rise might not bother you. Another idea, of course, is to consider changing more properties’ usage from office space to homes. This could be done alongside renovating dilapidated homes.
We definitely need to do something because, if we’re not careful, we’ll end up with a whole generation of 50-somethings renting rather than buying. And this would be unprecedented. We need to find a solution and end the current uncertainty.
JMI: Talking of uncertainty, I’d like to talk about the Decent Homes Standard. This has obviously come to national attention since the appalling death of the toddler Awaab Ishak, who tragically inhaled mould spores.
Mark: Although poor Awaab was living in social housing, there will certainly be knock-on effects for the private rented sector. After all, a lot of privately rented homes are badly maintained and have mould problems, too. It doesn’t help, of course, that we’ve got old housing stock in this country.
Overall, it’s a massive shame that it’s taken a tragic death like this to highlight the issue. But solving the problem isn’t going to be easy. How, for example, is a new Decent Homes Standard going to work? Who’s going to come along and say this or that isn’t good enough?
JMI: Indeed. The white paper suggests that homes should be ‘safe’, ‘comfortable’, ‘modern’ and in a ‘good state of repair’, but all these terms are a bit subjective. And how are they going to check every home?
Mark: Well, there’s no landlords register and currently no register of tenants either; so until the authorities have a handle on the exact number of privately rented properties and know exactly where they all are, we’re a bit stumped.
Finding enough money to police the new standards will be tough as well, especially considering how squeezed the public finances are. However, we shouldn’t let these problems stop us from acting. Something must be done.
JMI: Agreed. But we shouldn’t forget that it’s going to be hard for landlords to find the money to upgrade their properties, too. They’re not immune from the cost of living crisis.
Good point. And we shouldn’t underestimate the size of the challenge. The numbers involved are huge: 20% of privately rented homes currently aren’t up to scratch, which means that almost a million properties need upgrading.
Where is this money going to come from? Many landlords will simply resort to increasing rents that are already at record highs. And tenants are feeling the pinch, too. So it’s a tough nut to crack.
JMI: It has certainly been a challenging year all round. What has surprised you the most when looking back and what gives you hope for the future?
This year has definitely thrown up a few surprises. Who could have predicted the year that we’ve had? Twelve months ago, we were just coming out of the pandemic. And now we’ve had three different Prime Ministers in the space of a few months, different housing ministers, different chancellors, and a war in Europe to boot.
Things could be tough for a while longer, too. So we’ll have to remain steadfast. But I’m hopeful that things won’t get too much worse. Then we can get back to some form of normality especially if, as some reports suggest, the recession is shallower than some were originally predicting.
JMI: So, with Christmas fast approaching, what would be top of your Christmas list for the property sector?
I think that an increase in the supply of homes would be a great start. A stabilisation in the base interest rate would be good, too. If Santa is feeling especially generous, I’d also like a government that’s able to make things happen and introduce the reforms needed; then the Renters Reform Bill will finally become reality.
Overall, we need a steadier ship, calmer waters, and fewer surprises to blow us off course. And let’s not forget that we’ll be in the run up to a general election before we know it. This has to happen within the next 24 months, which isn’t a long time in politics.
JMI: No, it certainly isn’t. And talking of time limits, our time for today is sadly up. Thanks again for joining us, Mark. We ho ho hope you have a wonderful Christmas.
Mark: Likewise. See you next year. Merry Christmas to all.
If you'd like to watch the full conversation, click on the video below.
https://youtu.be/052AO6JDfms
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