Anne Ashworth, Property Editor
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Britain’s Got Talent, the TV hit of the last weeks of the Blair era, has shown hitherto untapped talents in acrobatics, singing and ventriloquism. The longest-running drama of the Brown epoch is likely to be Britain’s Not Got Enough Homes, which will test the skills of politicians, planners and construction companies to solve the housing shortage.
Anyone who already owns a home, or aspires to own a home, has an interest in this contest to provide the 60,000 extra new properties needed each year. The master of ceremonies will be the new Prime Minister himself, an enthusiast for a “homeowning democracy” and a supporter of a much more liberalised planning regime.
In A new map for England , we have set out the locations where the Government has ordained new homes will be built. But there are already concerns that all the extra homes proposed may not be necessary in every one of these locations: in the East Midlands, for example, supply could outpace demand, leaving a glut of properties and depressing local markets. The first rule of the Britain’s Not Got Enough Homes contest must be that government statistics — not a byword for reliability — should not be the only proof that more homes are required in an area.
A significant mismatch exists between the type of properties being produced and the types of dwelling that people want. In 2006, 45 per cent of the new homes built were flats, mostly in high-density developments. Evidence that buyers far prefer houses to flats, however, can be seen in the much larger price increases for houses. Construction companies proposing executive apartment blocks must be forced to justify this type of development. That rule must be strictly applied.
Many of those flats have been put up on plots on which just one house formerly stood: as a result of the doubling of the incidence of garden-grabbing, close to one third of the new homes in the South East now arise on existing residential plots — which are categorised as brownfield land. Under another rule, it must be possible to object to such developments that are so often out of character with their surrounding areas without being dismissed as a chronic Nimby.
At the same time, it must be acceptable to defend a development without being denounced as a saboteur of our green and pleasant land. This week the academic Germaine Greer argued that local industries in Cambridge could not recruit sufficient manpower as a result of a lack of affordable homes. We might all wish there was some conjuring trick to solve the problem, but, sadly, there is not.
SPARE THE BUY-TO-LET INVESTORS . . .
The demonisation of buy-to-let investors continues: in some quarters, they are now held almost solely responsible for driving up property prices beyond the reach of first-time buyers. Aghast at this, the Association of Residential Lettings Agents (Arla) has released survey findings that portray amateur landlords as the sober-minded suppliers of flats to let — an essential service.
According to Arla, the average buy-to-let investor is too dull to be a villain. Instead, he or she is a mid-fortysomething likely to own just one or two properties, bought as a form of long-term savings. When asked about their buying and selling intentions, more than half said they were “marking time”.
This will not still the voices calling for the abolition of the buy-to-let tax breaks. But it will calm fears that these landlords will be spooked into panic selling by the cooling of the market in most locations. They are unlikely to be the bad guys that turn a slowdown into a slump.
. . . BUT NOT THE NONDOMS
Embattled buy-to-let investors can only hope that the spotlight will increasingly turn towards the taxman’s lenient treatment of private equity bosses and foreign individuals who are resident nondomicile, the now notorious “nondoms”. Private equity bosses pay tax at just 10 per cent on much of their income — the reason why they faced a grilling this week from MPs. The even more fortunate nondoms are taxed only on the money they earn or bring into the UK. Thanks to those concessions, both groups are able fully to indulge their property porn fantasies.
There has been particular focus on the nondoms’ use of offshore trusts to snap up London houses, a dodge that enables them to pay stamp duty at the rate of just 0.5 per cent, rather than the 4 per cent payable on all homes above £500,000. That means that a family who has struggled to afford a £625,000 home faces the same bill for stamp duty (£25,000) as the purchaser of a £5 million mansion.
This all helps to explain why, as County Homesearch, the buying agency, reports, the capital’s choicest mansions and apartments are still often selling before the estate agent has compiled the details and that some people will buy even before viewing. The rich are different. To date, it seems that Gordon Brown has liked it that way. He could change his mind.
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