This Week in Property: The Latest News (6th May 2022)
Take a look at what our CEO Gill Fielding has to say about this week’s property news…
There are no winners…
Everyone has their point of view and everyone has their own idea about how the world and the UK should be run and inevitably it leads to there never being any winners.
We all know that there is a significant housing shortage and every government for the last 40 or 50 years has pledged to build 250,000 – 300,000 new homes per year – but they never have.
Sometimes that is due to political issues and they just change their mind, sometimes it’s due to restrictive panning laws and I read today that building of 100,000 new homes has been stopped by a different official body – the environment watchdog, National England.
Their concern is that the building will lead to increased levels of nitrogen or phosphorous in rivers and they have the power to stop building if that’s their view. I can see both sides of this debate: we need more housing but we need to protect the environment otherwise there will be no future but we need to find a compromise and that has to be in building sustainable environmentally friendly homes.
There’s no point sitting staring at each other with opposing views, we need to compromise otherwise nobody wins.
Property merry go round
I’m old enough to have seen most things come and go within the property world and Boris Johnson is pushing for right to buy to make a come back! Now this was a policy introduced by Margaret Thatcher in 1980 and it gave council and housing association tenants the right to buy their rented property at up to a 50% discount and estimates are that nearly 2 million houses have been bought under the scheme.
Now that’s 2 million homes no longer in the councils or housing associations hands and 2 million less properties available to those most in need.
That means those 2 million people have to then either rent in the private sector or stay with friends or family members at a time when all housing is tight and the private rental sector is straining to cope with all the potential tenants.
Although right to buy in principle is a great idea it cannot be implemented as a single policy as those properties need to be replaced otherwise all the government are doing is recycling the properties to give some to one group of people but it takes away supply for others.
Right to buy is a good idea as long as the government and the councils and the housing associations are replacing those properties sold with new ones and building more. Otherwise the disadvantaged only get more disadvantaged and that cannot be a good thing. Sadly, this sounds more like a right to win votes scheme to me.
Don’t get your knickers in a twist!
I see that the base interest rate has now risen to the heady heights of 1%. Frankly, so what? Anybody that’s ever attended even our basic 3 day property education training will know that the government’s medium to long term aim is to get interest rates between 1% – 2%, so there’s no surprise there and my best guess is that interest rates will rise again this year – and probably settle at 1.25% in the short(ish) term.
As a property investor starting in the 1970s I am personally used to the base rate being in double figures and even as high as the mid teens – and yet still property investing worked for me – you just have to budget for it and invest accordingly.
We teach all of our people to invest prudently and with a contingency and use at least 5% as an interest rate and that will serve you even now.
As usual, all these peaks and troughs financially can be handled with appropriate controls, budgets and a dose of common sense – so don’t get your knickers in a twist just plan, budget and cope!
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