Spectator Life

Fancy buying half a flat, paying 100 per cent of the maintenance and the cost of putting right a developer’s shoddy work? Therein lies the great scandal at the heart of shared ownership, the government scheme which BBC Panorama exposed last week but which I others were writing about over a decade ago. Shared ownership has allowed developers to put fancy price tags on properties which they might otherwise struggle to sell The concept sits at the heart of government efforts to increase the rate of home-ownership. Look around at the prices of London flats, compare them with average London salaries and you wonder how anyone can get on the housing ladder any more. But they do – sort of – thanks to shared ownership.

I’ve never worked out why anyone would want to buy an outfit over the internet without first seeing it in the flesh and trying it on. I know my wife does it all the time — although the constant piles of parcels by the door, full of stuff waiting to be sent back whence it came, pays testament to drawbacks of buying things sight unseen. Then again, a suit or a dress is only a suit or a dress. I would rather buy clothes online than I would a five-storey townhouse. But maybe I’m a bit of an old stick-in-the-mud. There are some buyers, it seems, who are only too happy to buy blind.

Why, Sir, you find no man, at all intellectual, who is willing to leave London. No, Sir, when a man is tired of London, he is tired of life; for there is in London all that life can afford.— Samuel Johnson Samuel Johnson made this remark in 1777 to one of his friends who lived in the wilds of Scotland. Covid, the internet and cars hadn’t happened at the time. But he did have a point. Many office workers have been told they are unlikely to return to their places of work this side of Christmas. And when you do return, it is likely that home working could be on the cards at least one if not two days a week. If that’s the case, do you really need to live in a central city area?

Buy to let remains a popular investment option for Brits, despite being the subject of major reform over the last three years. Government legislation since 2017 has been increasingly hostile towards buy-to-let owners but could the aftermath of the pandemic prompt a change? Figures from 2018 show that the Private Rented Sector [PRS] provides homes for over a fifth of the population, that’s more than 4.7m households, making it bigger than the Social Sector and it’s doubled since 2002.

The latest research from Deutsche Bank suggests that a dramatic shift in working patterns is on the way. 57 per cent of the 450 financial workers surveyed expect to be working from home between 1 and 3 days a week once the pandemic has passed. Covid-19 has not only disrupted our lives in the short term but is changing our longterm mindset. So, what does that mean for the property market? If you think it’s back to business as usual, you’ll need to redefine usual before you proceed. Our new reality now affords office workers the opportunity to live further away from their place of work, which in turn brings the prospect of more space.

It took a trip to the Land of Oz to make Dorothy value her home. For the rest of us, it took a global pandemic. During the past two months, our residence — whether that be a mortgage-free house or shared rental flat — has become our entire world: office, restaurant, cinema, gym and shelter, all rolled into one. If we didn’t know the ins and outs of our quarters before, we do now. Many people have developed a more personal understanding of a market that has played a vital role in shaping the British economy for decades. Housing costs in Britain are some of the highest in the world, more than quadrupling since the 1970s.

For those looking to buy or sell houses, lockdown has put many of the best laid plans on hold. Since lockdown was imposed on the 23rd March, the property market has entered into a period of suspended animation. We don’t know when lockdown will end, nor what the financial and economic collateral damage will be for the UK economy and we certainly don’t know what the ‘new normal’ will be or how long it will have to go on for. So, what do we know? Financial markets, although initially taking fright, have recovered somewhat. Falls of between 10 and 15 per cent across indexes around the world with markets seeming to have stabilised. At least for now.

It’s easy to look with doom and gloom at the Coronavirus situation and imagine that this could be the death knell for the property market. Why would you make the biggest investment in your life at a time of great economic uncertainty? Furthermore, the government has requested that the market effectively shut down while we fight this pandemic. In the short term, will there be disruption and pressure on pricing? Yes. In the longer term, is the market doomed? I am going to stick my neck on the line and say that property is set for a strong recovery. Before the pandemic struck there was a shortage of supply and an increase in demand for good property. That dynamic has not changed.

Given that the government is running a £40 billion deficit, is determined to increase spending on infrastructure and will not be facing an election for another five years, no-one should get their hopes up too much for tax cuts in the Budget. Indeed, most of the talk has been of possible rises. But if any tax is going to be cut it is likely to be Stamp Duty on property purchases, at least those made by owner-occupiers at the lower end of the market. No tax has been jacked up quite so much over the past two decades. When Gordon Brown started as Chancellor buyers paid a flat one per cent of the value of the property they were buying. Now there are progressive bands, as well as a three per cent surcharge for second or investment properties.

With prices in many parts of the city already beginning to fall, buying in London is a minefield. Striking a balance between liveability and getting a good return on investment is the trick we should all be aiming to pull off. Afterall, buy somewhere that’s already got too many tattooed men selling flat whites and you’ll end up paying the price later when you realise values in the neighbourhood have topped out. Equally, buy somewhere that’s cheap, but far below the radar for cool hunters and you could end up with the same problem. We’ve picked out some areas in the north, east, south and west of the city that have that perfect trade off between up and coming property prices and great liveability.

Staring into a stranger’s armpit on a rush-hour tube train can often lead to thoughts of moving to a tiny village. We imagine that, there, we might find the space to be ourselves. As a description of Louis de Bernieres’ fictional Surrey village, Notwithstanding, reads: it is a place where, “a lady dresses in plus fours and shoots squirrels, a retired general gives up wearing clothes altogether… and people think it quite natural to confide in a spider that lives in a potting shed.” Perhaps it’s just me, but as a Londoner, that all sounds rather liberating. In the interests of bucolic fantasies, we’ve put together a list of commuter villages near the capital.

At first glance you could be forgiven for thinking that Labour’s publication ‘Land for the Many’ is a set of policy ideas that solves the housing crisis. Increasing the supply of affordable housing and freeing up land to build, improving access to existing stock and transparency sounds fair, right? Yet tucked away inside the report, you’ll find a range of measures that could pull the market as we know it to pieces; it’s the most radical sets of property proposals since the mass building plan after the Second World War. The report’s editor, George Monbiot, has not thought through the unintended consequences of the proposals. Just one example and perhaps the most damaging is the desire to reduce land prices.