By the time you read this article, it is likely an election will have been called and if not in May, certainly sometime this year there will be one, and almost as certainly we will have a Labour government after that election.
So, what does that mean for property?
I see positives and negatives with the change in the government. Whatever colour the government is, and whatever colour our personal politics are, it is clear that serious work is required in the property field to address serious problems.
Looking at housing (which affects us all), there are three elements which need major policy change.
Firstly, there is a distinct lack of rented housing, both private and social, at a time when the trend of home ownership is falling (from a peak of 70.6% in 1980 to 64.3% in 2023), and the squeeze on supply is pushing rents up and having catastrophic effects for many people in this group. Recent legislation seems to have punished both landlords and tenants.
House price inflation has in the 21st century reached epic proportions. In the year 2000, the average house price in England was £75,219. In December 2023, the average house price had risen to £284,691. However, average weekly pay over that period has increased from £293 to £626, so in 2000, a worker needed 256 weeks pay to buy a house, and in December 2023, the same average worker needs 455 weeks to pay for his home.
As for Council Tax banding, not a bad idea in itself, but now 33 years out of date. Values are assessed as at 1991 and clearly whereas there has been a general price rise (as above), some areas have improved dramatically, some have dropped (and not just risen more slowly, actually dropped), ‘and in general it’s a bit of a “mess”.’ There is the other issue in that Council Tax bands are the same across the country, Westminster, unsurprisingly, has a very high proportion of Band H houses. A Band H occupier in Westminster pays £1,824.10 and the few Band A occupiers pay £604.04. Compare this to Newcastle city where the Band H levy is £4,224.68 and band A is £1,408.23. Clearly there is something wrong here!
Within the commercial property field, the Shadow Secretary of State for Business and Trade Jonathan Reynolds has spoken about “making rates much more market responsive so they react to real word conditions
not spreadsheets in Whitehall”. A slight shift towards responsiveness has already been taken by the current Conservative government by scrapping a downwards transition in commercial rates. Labour also propose more regular revaluations in business rates. Whereas this will be seen by many as being good, for those of us who practice in rating, we realise it is going to be difficult to deal with as the Valuation Office is already overwhelmed with appeals and challenges based on a six year time lapse between the last two revaluations.
Of course, there are continued mutterings from all parties about replacing business rates. But these discussions have been going on for at least the 43 years plus that I have been in practice – I don’t see anything happening “tomorrow”.
The opposition have now had 13 years in opposition to prepare sensible policies that benefit everyone. All we can hope is that they’ve invested this time wisely to produce thought out and considered policies rather than some of the “knee jerk” reactions we have been used to!
www.bivbowes.co.uk
