Michael Riley, a former Head of Sales for Savills and Head of Operations for Romans in the Thames Valley, has suggested that whilst house-building is a key issue, multiple home ownership is also a fundamental reason for the shortage of housing and an area that astute political parties will tackle first.
He said: “We can’t keep building to accommodate demand, land is in short supply, particularly in locations where people most want to live. In reality, there is plenty of property, but with some investors owning numerous buy-to-let properties, prices continue to rise making it impossible for first-time buyers to pull together enough deposit to make that first step.”
Recent figures released by Wriglesworth suggested buy-to-let landlords have accrued returns of 1400% since 1996 enabling them to continue taking equity to fund new purchases.
Mr Riley, now Director of Capital & Coastal, points out that housing is not only too expensive for buyers and renters, but also for the Government who are having to subsidize the accommodation costs of the less well-off.
He said: “There are so many different ways that the future government could look to support, if not solve, the problem of unaffordable housing due to a lack of stock (the average house now costs five times the average person’s annual income).
The issue isn't just building more, although that would assist. We anticipate political parties will make multiple home ownership less attractive by heavily taxing people who buy second homes and preventing buy-to-let landlords buying up before first time buyers get a chance.
At some point, perhaps not even until the next election, it’s likely that one of the political parties will calculate how many buy-to-let landlords would be perturbed by the implementation of an onerous tax regime, versus how many votes could be won from helping those currently locked out of home ownership, get onto the ladder.
Not only would it help first time buyers, but it makes for a far healthier housing market overall because, if the market continues the way it is doing with no-one able to buy their first home, there will suddenly be a deluge of properties for sale at the top end of the market with no one to buy them. Current schemes, such as Help to Buy, only fuel demand, they don’t solve the supply problem which is what really needs to be tackled”.
Methods the future government may take in tackling multiple home ownership could include abolishing tax relief on buy-to-let mortgages, stopping people declaring which house is their primary residence retrospectively which currently enables them to play the system to select the property which has earned the greatest capital appreciation, a two tier stamp duty or even a regionalised stamp duty.
