A month into Number Ten, Prime Minister, and the property market is still waiting for a sign that this government understands what makes Britain move.
You’ve ruled out scrapping stamp duty this year, which is disappointing for anyone who wants to see the market moving again.
Thankfully, you’ve distanced yourself from rumours of a land value tax, because too often when governments meddle with the property market the unintended consequences are worse than the problem they were trying to solve.
But parking a bad idea for 12 months is not the same as being brave.
So let me be plain. Britain has stopped moving. Full stop.
The housing market is one of the biggest drivers of economic activity in this country, and when it stops moving it acts as a brake on growth.
Don’t just take my word for it. Connells Group’s latest figures show that it now takes an average of 104 days to crawl from a sale being agreed to exchange of contracts – compared to 73 days just 10 years ago. For a leasehold property, that rises to 155 days, compared with 97 for a freehold.
One in three deals collapses before it ever gets there. And here’s the kicker. In April, 61% of deals took longer to reach exchange after the sale was agreed than it had taken to find the buyer in the first place. It’s no wonder that many estate agents feel under severe pressure.
I’ve written before about some transactions taking up to five or six months to get over the line and asked why, in a digitally savvy age, we’re still tolerating such archaic processes.
We saw what this industry was capable of around the last stamp duty deadline. Agents, conveyancers, mortgage brokers and solicitors worked late, chased every document and somehow dragged thousands of transactions over the line.
Britain has built a housing market that can sprint towards a tax deadline but cannot jog on an ordinary Tuesday. That can’t be right.
There are two separate problems here, and they need fixing together.
At the second-hand end, the stock is there. Supply is at a 12-year high, but too much of it isn’t selling because vendors’ expectations remain well above what buyers are prepared to pay.
That’s a pricing problem and, frankly, it’s ours to fix as agents. As I said recently, an instruction without a buyer quickly becomes a price reduction. Taking on overpriced stock might make the window look busy, but it does nothing to get Britain moving.
At the new-build end, it’s the opposite problem: a genuine drought.
Fewer planning permissions were granted last year than at almost any point since 2013 and starts have stalled. New homes don’t just add to the housing stock. They unlock movement throughout the rest of the market.
Every new-build completion has the potential to begin a chain. Without enough homes entering at the bottom, the whole system eventually runs out of road.
When movement stops, so does the spending that comes with every transaction: the kitchens and bathrooms, carpets and flooring, furniture and white goods bought at retail parks, and the builders, plumbers, decorators and removal firms who all get paid when a home changes hands.
A property transaction is not simply a change of address. It’s what stimulates the wider economy.
So here are three things I’d ask of you, Prime Minister.
First, don’t just park the land value tax. Kill it off for good.
Then go further by setting out a proper route towards scrapping stamp duty on primary residences. It’s a tax on movement, aspiration and economic activity. We shouldn’t be surprised that people remain in homes that no longer suit them when the government presents them with a five-figure bill for moving.
Second, make upfront information and property pre-packs the norm, rather than a nice-to-have. A chain moves at the speed of its slowest, least-prepared seller, so every deal should come to market ready to transact, not merely ready to advertise.
I have long argued that good agents should not wait for government and should start embracing upfront information now. I still believe that. But voluntary action alone cannot solve a problem that stretches across an entire chain.
Third, declare a housebuilding emergency and mean it.
Treat planning permissions and housing starts as economic infrastructure, not simply housing statistics. And judge success by the number of homes started and completed, not the number of targets announced from a podium.
A market with too little to buy can never flow properly.
Estate agents have responsibilities too. We must price accurately, communicate honestly, prepare sellers properly and stop pretending that an instruction is valuable simply because it appears on a portal.
But agents can’t fix the tax system, unblock planning or redesign a transaction process that is no longer fit for purpose. These sit with government.
The government says it wants growth. Housing is one of the quickest ways to unlock it. Get Britain moving again and the benefits will reach far beyond estate agency, supporting businesses, jobs and communities across the country.
Prime Minister, taking the handbrake off the housing market would be a very good place to start.
Paul Smith is founder and chairman at Spicerhaart.
Comments (1)
One of the problems with a vendor seller pack is that some of the information may be out of date by the time of exchange and completion. ie the insurance policy may have expired, the balance on service charge account is likely to have changed. and reolies to certain other questions may also have changed.