The Government has come under fire after finally publishing its Housing White Paper yesterday.
The 104-page document, titled Fixing Our Broken Housing Market, highlights the forthcoming consultation on the lettings fees ban as evidence of support for renters, and reveals plans to introduce three-year tenancies on Build to Rent developments.
But despite communities secretary Sajid Javid telling MPs that first-time buyers are “glued to estate agent windows” dreaming of buying their own homes, the actual document does not mention the agency sector at all, other than in reference to the lettings fee ban.
Nick Leeming, chairman of Jackson-Stops & Staff, said the Government had thrown in the towel on home ownership.
He said: “The emphasis on help for people renting their homes is positive, but is in apparent contradiction with the 3% Stamp Duty surcharge introduced on second homes in April 2016, which was intended to deter buy-to-let investors to the benefit of first-time buyers.
“The change in tone heralds the death knell for the flexible ownership model that benefited the baby boomers and Generation X.
“However, Prime Minister Theresa May’s government has a real drive to build more homes, which we haven’t seen in a while, so I hope that this new age of tenure neutrality won’t just replace 30 years of failings to build enough homes for people to buy.”
Leeming said it would be refreshing to see Stamp Duty problems addressed.
Paul Smith, chief executive of haart estate agents, was also scathing about the document, claiming it “exhibits a government that continues to shy away from the radical changes that have the potential to really shake up the industry”.
He said: “Favouring tried and tested policies such as increasing the use of brownfield sites and bolstering SME house builders are old hat: they have not been able to make a significant difference in the past – what’s to say they will do now? We needed to see radical use of Green Belt land to really deliver change.
“Many of the Government’s proposed changes to the rental market will only see costs passed on to tenants through increased rents over the longer term, and watering down starter homes policy will only leave behind a generation who are currently faced with house prices that are on average eight times more than their average earnings.
“Build to rent is a good thing – but it will not get people on the ladders, which is what young people really want.
“It was particularly disappointing to see that there was no mention of Stamp Duty, which is a major obstacle for both first-time buyers and downsizers. Housing problems need to be beaten from both ends of the market – something that today’s government has sorely failed to recognise.
“Sajid Javid has declared the UK housing market as ‘broken’, however he has failed to produce the toolkit to fix it, and the barriers that are holding the majority of the market back remain in place. Today’s paper held the key to make real change – but was handled by a government that was not prepared to make it.”
Despite rumours to the contrary, the report said the Green Belt would continue to be protected.
Mark Hayward, managing director of the NAEA, while welcoming the measures, did raise issue with that.
He said: “We are not advocating building on ancient woodland; however, we do believe the Green Belt policy should be reappraised. Let’s not allow objections to building on the Green Belt help further deteriorate the housing crisis.”
The move towards three-year tenancies was welcomed by David Cox, managing director of ARLA.
He said: “ARLA welcomes any attempt to improve stability in the housing market and it is important that tenants feel that they are secure in their homes and are able to plan for the future.
“We welcome the Government’s approach to this, and have been working closely with the communities department on proposals for incentivising longer-term tenancies after all, it is in the best interests of landlords, tenants and agents to have long, well maintained tenancies. It is a fallacy that a regular churn of tenants benefits anyone.”
Other measures include compulsory purchase orders for councils to take over stalled sites for development and more support for institutional investment in Build to Rent.
But Jeff Doble, of London agents Dexters, described the focus on stalled sites as misconceived. He said: “The stalled sites initiative is misconceived: it is likely to create unintended consequences.
“This is a classic case of ‘Nanny knows best’, with the Government failing to understand the issues and being too quick to dismiss the views of the industry.
“Once again, this is too little too late in my view – tinkering around the edges, rather than dealing with the causes for the slow rate of new-build – the planning system, associated charges and Stamp Duty.
“It is impossible that these measures will create the step-change that the Government says it needs to reach its 2020 target of one million new homes. Brownfield land is often more valuable in existing use than risking the enormous costs, delays and uncertainty of the planning system.”
Simon Gerrard, past president of the NAEA and managing director at Martyn Gerrard, was equally disappointed.
He said: “It shows that the Government is more concerned with producing soundbites, rather than realistic solutions.
“They had an opportunity to really do something to address the problem of providing new homes, but this White Paper only serves to demonstrate a lack of understanding of the market and what is required to fix it.
“What has been delivered is merely a wish list of what the Government would like to make better, with no tangible detail on how to achieve this.
“The schemes outlined will be discussed and debated for longer than they are implemented, with nothing new being offered.
“We need to simplify the system and make it easier to build homes that people want, which relies on land availability and a simplified planning system.
“I am disappointed this has not been properly addressed and so is unlikely to be achieved.”
The White Paper did garner some support from the National Approved Letting Scheme (NALS), which welcomed the change in focus on renting, although that shift has also brought with it the lettings fee ban.
Isobel Thomson, chief executive of NALS, said: “For too long the the private rental sector has been the poor relation in housing. The paper marks a welcome change of focus.
“NALS commends the idea that Government want to make renting fairer and these measures are clearly on the right track. But the PRS is still very disjointed and it’s important we pull together as an industry to improve people’s experience of renting.
“There is a clear acknowledgement now that fees will be banned, NALS has been working closely with Government on the upcoming fee ban, and we look forward to seeing the details of the consultation. What’s important is that when the fee ban comes in, the tenant isn’t disadvantaged, and letting agents are still able to provide a service to the tenant.”
“Looking to institutional investors to provide longer tenancies makes sense, but ignores the fact that institutional investment cannot currently meet this demand. In the short term, it is private landlords who will need to be supported and encouraged to provide longer tenancies.
“Fairness for renters doesn’t need to disadvantage the industry. If we are to see a fairer, safer private rented sector then the focus need to be on the rogues and criminals, who avoid responsibility and whose criminal behaviour damages the sector. We want to see more finance for better enforcement and regulation.”
Estate agency shares had a mixed performance in the aftermath of the document’s release.
Savills closed the day up 3.7% at 827p while Foxtons rose 1.23% to 97p. Countrywide was up a minor 0.67% to 184p but Belvoir slipped 2.29% to 106p and LSL Property Services fell 1.85% to 199p.
Purplebricks closed up 2.5% at 213p.