Hostile Environment. It is the catchphrase of a government that seems intent on wrecking the entire nation’s sense of security, including that of the unhoused, the improperly housed and the already housed.
This lack of security provided by the Government has been underlined incessantly in recent weeks – just as local elections are due.
Never have so many government departments shown themselves to be so inept or callous, or both.
This particularly applies to the departments which have a direct interest and responsibility for housing – along with the Treasury.
There is the Home Office, the cuddly name for an interior ministry with all that implies without the cuddles; the Department of Work and Pensions, ably failing the disabled, the homeless and the needy on benefits; and, of course, the Ministry of Housing, Communities and Local Government.
Will anything change now that Sajid Javid has departed from the last to go to the first, and as of yesterday, we have yet another new Housing Secretary of State in the form of James Brokenshire?
It seems doubtful.
A great swathe of government has its fingers in housing, one of the most basic of human needs along with health and education.
Yet, the Government ignores the social housing sector and arrogantly forces private landlords and agents into becoming unpaid minions (slave labourers?) for the Border Agency, which itself is considered unfit for purpose.
It conscripts sales and letting agents on behalf of the Financial Conduct Authority and contemptuously taxes housing transactions, never mind the cost, pain or debt it brings to the individual.
And there is no sign of this tragic farce coming to an end soon, no matter what signals the voters might send at the local elections on Thursday.
Help to Buy borrowers enticed into the market by the Government and coming to the end of their initial terms, will have to start paying interest and will often find themselves unable to remortgage to better terms as they are leaseholders liable to onerous ground rent increases.
They will find themselves in the same situation as the unfortunate buyers of starter homes in the the early nineties – with unsaleable properties and unaffordable costs.
Private sector landlords find themselves excoriated as rogues and forced into conducting border checks on tenants holding unreadable, but probably genuine, documentation.
Savage fines are payable for innocent mistakes, while tax concessions that made buy-to-let worthwhile are removed and the private rented sector itself diminishes.
Sales and letting agents who provide the experience and expertise that makes the housing market function are expected to demonstrate the skills of a financial regulatory authority and keep the international money launderers at bay.
Checking the provenance of buyers and tenants and their cash costs expensive time and effort even as the markets fall. Failure to spot a crook leads to draconian punishment.
Meanwhile, the home owners themselves hunker down, hoping that the Government won’t put new obstacles in the way of moving or improving by way of extra Stamp Duties that will make selling difficult and buying harder.
And the vulnerable in the care of the DWP find it increasingly difficult to find social housing or to rent privately.
Adding insult to injury, current government consultation papers were issued showing confusion between letting and managing agents, leaseholders and tenants, and – wait for it – ‘practise’ and ‘practice’.
However, the Government ordains it is the agents who must take an exam.
Thursday could be an interesting day and perhaps a foretaste of the future. Meanwhile housing operates in a hostile environment. It is a dismal scene of falling markets, fines, imprisonment and tax.
The new Housing Secretary has much to do. Whether he will be around long enough to even discover what needs to be done, let alone do any of it, is another matter.
- Malcolm Harrison is a regular commentator on the housing market
Superb piece Malcolm. Absolutely superb. Please send it to all the dailies. Many could do with the education.
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Well said Malcolm, truth needs telling and we need to join up to help get the message heard.
I’m contactable on ChrisDanielLM@gmail.com
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A great precis of a currently doomed market and strategy driven by hate greed and sheer stupidity. The myopic focus the government the press and local authorities have on the PRS is the most damaging piece of social self harm perpetrated on our society in modern times. It preys on landlords and agents as the demons of our time, terrorism doesn’t get a look in and all the while the consequences on all and particularly tenants are devastating. It’s driving crucial rented housing from the market in thousands a month, driving up homelessness, and impoverishing and bankrupting landlords who by the way provide or used to provide 83% of all new dwellings in the UK year on year. Which geniuses decided this is the way to go?
well done Malcolm
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It’s a good article that makes the quite correct observation that the ills of the market, are on balance, down to government mismanagement.
Unfortunately government don’t like it when you point that out. They prefer someone to blame. Step forward landlords.
When the market is still a shambles five years from now, despite private landlords having fled the market. They will scratch their heads for someone new to blame and probably blame their current new fav ” build to rent ”
Unfortunately governments don’t do blame, or honesty. So despite this being a very good article, I think Malcolm could copy and paste it again five years from now and it will be as relevant then as it is today.
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Yes, Governments and politicians show no loyalty. Before the onslaught on private landlords, most Tories considered BTL as a perfectly legitimate business. Now they have stepped on the far left populist bandwagon, even outdoing what Labour had in their recent Manifestos. So you make an interesting point regarding how they might treat BTR in the future.
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Please stop criticising the government, as an unencumbered landlord section 24 has done wonders for my cash flow and profit. Look how well fed my tenants are now that they are aware of the food banks and the sartorial excellence provided by charity shop clothing. Utopia‽
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Just two words. SPOT ON!
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Really excellent piece Malcolm. Could not agree more!
There is a massive disconnect between local government – screaming out for landlords – and central government – doing everything in their power to deter landlords.
I am linking to a thread on Property Tribes that goes into more detail and also has a video with local authority housing teams who are travelling all over the UK trying to find landlords to take assist with their housing obligations.
You can see how uncomfortable my questions are to them:
https://www.propertytribes.com/what-causes-homelessness-in-the-uk-t-127633000.html
Thanks again for writing such an erudite summary of the whole situation with regards to Government and media attacks on the housing sector.
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Good article.
I posted this late in the day on 10th April.
For those who missed it.
Perhaps this is one reason why the Government has become so hostile?
Who runs the largest and most profitable ‘agency’ model ever devised?
Have you ever dreamed of charging between 2% and 3% agency fees, on average, increasing to 12% for the most valuable properties?
With this model, you do not even need to list, manage or have 100s of branches or pay for any sales teams to provide any sort of service. All you need is an HQ and fee collection team milking billions of pounds pure profit!
The twist with this nationwide agency is that you charge buyers, instead of sellers.
Does this sound unlawful as their fees are fixed, with no ability to negotiate, dare I say – a cartel?
Just imagine also receiving 20% of other agent’s sales fees on many transactions for nothing!
Then consider the hypocrisy of CMA fining a very small group of agents in Somerset £370,000 for agreeing to a viable fee, to allow them to make a fair % of profit on turnover, at far less than the above average agency fee – that is only payable on completion of that agreed service?
Particularly, when that 1.5% fee is the same fee that is openly advertised as an agent’s average fee on TV by the largest call centre agent?
What happened was wrong but not £370,000 worth of wrong.
The effect Stamp Duty Land Tax is having on the market, buyers and buy to let landlords is far worse?
Room101
APRIL 10, 2018 AT 16:57#14
Ah yes Thomas. The tax you pay to put a roof over your head with the money you have already paid tax on.
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With the 17th Minister in 18 years (especially with name like Brokenshire) and the government’s clear misunderstanding of the residential rental market, I have no faith that the new minister (who also has no housing experience) will do anything but damage the situation further. Hold onto your hats harder Landlords.
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The new minister is a known hater of BTL and is presumably keenly on board with the govts march to the left. Sickening.
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I hate the M25 but the alternative routes are just as bad and take just as long.
Realistically there is no scaleable social solution to housing so whether it is BTL or professional letting provision it makes sense for the latest minister to understand why BTL shouldn’t be broken by legislation or artificial restrictions.
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Our financial wellbeing has become over the last 30 years inextricably linked to the value of our homes. Acively encouraged by Governments over the years – what did it matter if pay hadnt risen in real terms for years, the value of your house did, so the real state of your finances was never exposed. It is only when Governments introduce policy which significantly scews the market, do we see the ponzi scheme unfold – and usually quickly and catastrophically – anyone remember the John Major fiasco and the depression that lasted for close on 10 years?
The level of incompetence in Government is staggering, policy made on the hoof to get them from one election to another. Meanwhile we all try to make our way through our lives keeping our businesses going, our children educated and a roof over our heads – all of which are now for many – becoming extremely difficult. No Government will ever grasp that we will never flourish as a country if we are bound by excessive red tape and high taxes.
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The Rastafarians would say that debt(s) are the modern chains of slavery. A Marxist would say that all property is theft……..Blockchain is coming………..with it the theoretical possibility to transact fast, discretely and with integrity. It may look rough now, but in five years the sea level will be completely different……. I’m working on my ark.
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