The key property issues the next government must focus on

Mike Cook, chief mortgage officer at Market Financial Solutions, explores what property-related solutions the public would like to see prioritised during the General Election campaign and beyond.

Related topics:  Finance News,  Mortgages
Mike Cook chief mortgage officer at Market Financial Solutions
11th June 2024
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The learning objectives for this article are to:

  • Understand what property-related challenges the public would like prioritised following the upcoming General Election.
  • Analyse what various societal pressures may take centre stage in the build up to the election.
  • Identify the economic strengths that show the UK property market is on a solid footing.

So now we know. It’s going to be a summer election.

Drenched in rain, with Things Can Only Get Better blasting in the background, the Prime Minister confirmed a general election will take place on July 4th. Cue countless thought pieces on what this’ll mean for the economy, society, and the property market.

There’s little point adding to this. Everyone has their thoughts on what’s on the horizon, and we can all make educated guesses on what’s likely to occur.

Instead, rather than looking at what could be on the way, it may be more worthwhile addressing what the next government should focus on. There’s no shortage of issues that voters want prioritised after all.

When asked about the important issues facing the UK today, adults in Great Britain reported that it was the cost of living (87%), according to the latest ONS data. This was followed by the NHS (85%), the economy (68%), climate change and the environment (61%), crime (59%) and housing (58%).

That last choice is particularly noteworthy. The proportion of adults reporting housing as an important issue has jumped since the ONS first started asking about this in October 2022.

We’re seeing similar results elsewhere too. Housing, according to YouGov, is now more important to their respondents than the environment, and tackling crime.

Also, while not exactly surprising given the source, a recent poll from SpareRoom found the ongoing housing crisis (85%) tops the list of key priorities renters want addressed by the state. It scored higher than inflation, NHS waiting times, and more.

Given our collective record, this isn’t surprising. We’re simply not doing well housing wise. The property market has plenty going for it, and recovery has been seen in recent months. But, we still have a long way to go until the fundamental supply and demand imbalance is rectified.

For perspective, the UK has only built 33.5 new dwellings per 1,000 people over the past decade, lagging behind several other developed countries. Also, England’s social housing sector has shrunk, and the share of privately rented homes that are affordable on benefits has dropped.

Clearly, there’s work to do. And while the pressure will be on the next government to simply get building, they’ll need to juggle other housing priorities too.

What we’ve uncovered

At MFS, we don’t want to solely focus on providing capital for property investors - and nothing else. Which is why we have been producing educational content and independent research for several years now. We want to help keep our brokers and borrowers informed on what’s going on in the market, and hopefully provide insight for their next move.

To that end, we’ve gained plenty of knowledge on what investors, homeowners, and the wider public want to see prioritised. Our Q2 2023 report, for instance, focused entirely on the property market’s policy wish-list. The results of our survey found that just 21% thought the government was doing enough to tackle the housing crisis.

Ouch. So, what did our respondents want changed? Well, some 71% wanted action taken to improve the quality of rental properties in the UK. Also, 67% were in favour of higher taxes or controls on holiday lets and investments in tourism hotspots, while 65% wanted higher stamp duty for non-UK residents buying UK property.

Wanting state intervention is a common theme we see running through our research. Our Q3 report from last year explored how product withdrawals had impacted homeowners and homebuyers. Within the results, we found that only 35% of respondents thought the government was doing enough to calm the mortgage market.

Although, with a lack of suitable property options available, not being able to get a mortgage may be a moot point for many. As we wrapped up 2023, we focused on the worrying rise of empty residential and commercial properties we’ve seen in recent years.

As should be obvious by now, people want to see the government step in here. Our Q4 results showed that 67% of the public believe the government should do more to incentivise people to buy and renovate derelict, empty properties.

Just over half (51%) felt that landlords who own properties (residential or commercial) that have been empty for more than 12 months should be forced to sell them, and 61% wanted to see stricter regulations to prevent people from leaving their property vacant or derelict.

Looking ahead with the only thing that’s proven to work regularly

This is a hell of a to-do list. In the property world alone, the public wants the government to focus on building, improving the rental market, getting tough with taxes, tackling the issue of empty buildings, and – as our latest report on gazumping shows – introduce laws to ban the practice entirely.

Unfortunately, it looks like most people don’t think the powers-that-be are up to the task. At the very least, there’s a lot of uncertainty looming where Whitehall is concerned.

When we examined investment trends at the beginning of the year, around half of our respondents revealed they thought the result of the upcoming general election could have a negative impact on their investments.

Meanwhile, 56% said the amount and complexity of regulation they face makes it challenging to manage their property investments, and increasing regulation was deterring 54% from investing further.

So, in some areas, property buyers and investors want tougher regulations. While others are struggling to progress with what’s in place as it is. This is going to be a tough nut to crack for whoever’s next in charge.

In all honesty, none of us know exactly what’s on the horizon politically. All we can do is adapt as new details come to light.

For now, we should all focus on the parts of the economy that are – finally – calming down and recovering. These are the elements we can factor in, and prepare for.

In truth, there is plenty to be positive about. Inflation has slowed right down and at 2.3%, we’re so close to actually being on target for a change. We also recently left a recession in the dust with the fastest GDP growth seen in nearly three years.

All of this has made Andrew Bailey very cheerful. While keeping the base rate unchanged at the most recent vote, the Governor of the Bank of England confirmed he was “optimistic” that we’re moving in the right direction.

This confidence is spreading too. Despite everything, sellers feel now is a great time to get their properties on the market, with Rightmove reporting that average asking prices hit a new record of £375,131 in May. Buyer confidence is also bouncing back, with Zoopla detailing that property sales rose by 12% in the year to March.

Of course, all of this couldn’t really be facilitated without an understanding, accommodating lending scene. Thankfully, after a couple of years of retreat and hesitancy, high street lenders have bounced back too. Mortgage approvals hit an 18-month high in march, rising for the sixth consecutive month.

We’re entering the election period on a solid footing. But, if we’ve learnt anything from the last few years, it’s that the entire political and economical landscape can be knocked off track without a moment’s notice.

One minute, you’re planning a holiday-let investment strategy. The next, you’re cancelling viewings because of a global lockdown. One day, you’re working with a financial adviser to plan your next purchase. The very next day, the market implodes following an ill-thought-out mini budget.

The only thing that’s been proven to work in the face of these challenges is adaptation. It’s here where the specialist finance market can offer a way forward for investors, with products designed to remain flexible in the face of uncertainty. As we all keep an eye on the headlines in the build up to July rest assured, we will be ready for any outcome.

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To recap, this article has helped you...

  • Understand what property-related challenges the public would like prioritised following the upcoming General Election.
  • Analyse what various societal pressures may take centre stage in the build up to the election.
  • Identify the economic strengths that show the UK property market is on a solid footing.