web analytics



Copyright 2015 Libero Themes.
All Rights Reserved.

8:30 - 6:00

Our Office Hours Mon. - Fri.


Call For Free 15/M Consultation



Westlake Legal Group > home ownership

Tim Briggs: Why London is mostly a left-wing city

Cllr Tim Briggs is a councillor in Lambeth and a List Candidate for the London Assembly 2020.

When people from outside London find out I am the only Conservative councillor left in Lambeth, they often ask me why London has become a ‘Labour city’. Here are some thoughts, based on my experience of why people in London vote Labour.

First, Labour has spent decades pushing a narrative in London that Tories are evil rich people who do not care about anyone but themselves and their rich friends, whereas Labour activists are normal people. This is of course nonsense – the majority of Labour councillors in Lambeth are well-off metropolitan types that never miss an opportunity to signal how much they care about everyone, whilst many of the Conservative members in my constituency seem to work hard and live modestly, quietly doing community and charity work.

The ‘Evil Tories v Virtuous Lefties’ narrative draws from a tradition with deep political roots in Artistotle, then Thomas Aquinas, Rousseau, and Marx – that people in power should be the people who are the ‘most moral’. So however appalling the consequences are of Labour decisions in Lambeth – libraries closed, homes in disrepair – at least the councillors in charge are like us and not those evil Tories, right? Or so the argument goes.

Yet poorly-run local authorities like Lambeth actually discriminate against people on lower incomes by taxing them more. Put simply, as higher tax removes disposable income from people’s pockets, so it removes the opportunities and choices they have to make their lives better. For example, the annual £614 difference in Band D council tax between Labour-Lambeth and low-tax Conservative-Wandsworth next door is roughly equivalent to two laptops for two children, to help them to get to university. Which is why in the State of the Nation Social Mobility Commission Report of 2018, Conservative-run Wandsworth was the 4th best borough in the country for children from lower-income families to do well in life, and Lambeth was not.

Another reason is that, like the Mayor Sadiq Khan, Labour authorities shamelessly use public money on propaganda and PR to promote themselves. Labour councillors spent £1.4 million of public money last year telling residents what a great job they were doing. When the Labour cabinet decided to shut Children’s Centres, they claimed their hand was forced because an extra £1.4 million from central government was needed. Successes belong to them and are given publicity; failures, if discussed, are the fault of the Tory government, and proof that their ‘fight’ must continue. The message is that crude, but it seems to work, and there are no local newspapers any more to highlight how daft it all is.

Like all effective political lies, it has a basis in truth. Labour councils in London make great play of the fact that central government grants to local authorities have been reduced since 2010, and this fuels their excuse that all the bad outcomes from their decisions are somehow the fault of the Government. Funding to local government certainly has been reduced to help balance the budget nationally after the last Labour Government had hollowed out the public finances by 2010. But in Lambeth any mitigation of a difficult financial situation came appallingly late in the day. In 2016, Labour councillors finally reduced Lambeth’s bloated staff bill by £25 million, but had they done so in 2008 when the economy first crashed, they would have saved a cumulative £250 million, which is only slightly less that the amount they claim to have lost in government funding.

Lambeth is also very diverse, and when you talk to residents in the most diverse parts of the borough, immigrant communities will say that the Blair Labour government looked after them when they first arrived in the UK. But memories of Labour’s largesse with public money are fading. I was recently invited to a dinner with a charity from the Bengali-speaking community where many British Bengali-speakers admitted they were now far more likely under the Conservatives to achieve their aspirations, for their businesses to do well, and for their children to go to university, than under Jeremy Corbyn.

My borough is also full of young people, who if they vote at all, tend to vote Labour. People who aspire to own their own homes move out of London to where property is cheaper. Vauxhall in the north of Lambeth and Streatham in the south are full of Lib Dem or Labour voters – doctors and health workers – who do not accept that the extra NHS funding under the Conservatives will ever be enough, compared to a fantasy of infinite funding proposed by parties on the Left. They live comfortably, and care less about tax rises than a moral imperative that their profession be considered more important in the national consciousness, and that their part in the national consciousness be elevated accordingly.

A broader reason that people vote for left-wing parties is this – that how economic growth works is harder to understand than the idea of giving money away to help people. Understanding how reducing taxes on businesses generates more business income and therefore more tax income, which can then be spent on schools and hospitals, takes a genuine economic world-view, which people on the left appear not to have, or to minimise, or refuse to accept. Labour councillors in Lambeth tend to be well-intentioned but confused ideologues who work in public services or PR, and for them, not prioritising the nitty-gritty of how wealth is created is a matter of pride.

Londoners also like the Labour Mayor, Sadiq Khan – London is possibly the most diverse city in the world, voted overwhelmingly to remain in the EU, and Khan appears to represent that diversity, playing up to that audience whenever he can by talking about Trump and Brexit. Yet no Londoners can name anything the Mayor has achieved, on housing, transport, or crime, and it has not gone unnoticed that a disproportionate number of children are being relentlessly stabbed and killed under his watch. Sadiq Khan’s standard response to everything is that the ‘evil Tories’ don’t give him enough money, yet he wastes his own budget on public relations to aggrandise himself in the media. Shaun Bailey is an excellent Conservative candidate for Mayor and would be more widely-known but for Brexit. London activists should keep putting a simple question to the voters on the doorsteps in London: ‘Can you name one achievement of Sadiq Khan as Mayor?’

Most worryingly, Labour activists in Lambeth have worked out how to get votes without even trying. Labour councillors in Lambeth now pay two of their cabinet members £10,000 extra a year to remind community groups and organisations that any money those groups currently receive would be jeopardised if Labour lost control of the council. In this way it is possible for every resident connected with the council to actively dislike the Labour councillors, to openly express their dislike of Labour councillors in public meetings, but to still vote Labour. It is also no coincidence that leaders of community organisations in Lambeth are often now Labour party members. Considering how few people actually vote in local elections, Labour brings together word-of-mouth support from local organisations and its own massive party membership to win elections. This strategy of making local community, church, charity, sport and other groups feel dependent on keeping Labour councillors in power has been more instrumental that anything else in ensuring that many London boroughs now have no Conservative councillors at all.

So a final reason why people in London vote for left-wing parties: they can afford to. In the 35 years since trade liberalisation and ‘Big Bang’ in the City, wealth from the rest of the world has poured in to London. People can ‘afford’ to be liberal, to fetishize the passionate outbursts of outspoken teenagers on climate change, to be daring in the eyes of their friends and contemporaries by supporting millennial cults like Extinction Rebellion with its absolutist, circular logic, and the hard-Left, anti-capitalist Green Party. Imagine having so much money you can glue yourself to a bridge rather than go to work. Yet telling climate change activists that the UK has reduced its harmful emissions by 22 per cent since 2010, despite the UK economy growing 36 per cent, or that the UK only produces one per cent of the world’s CO2 emissions, is not enough. For these people living in a bubble of half-formed ideas about what is moral and how to make their lives mean something more, the UK has become the centre of an immoral world, the heart of capitalism where capitalism must be fought and defeated, and London is the centre of the centre of the world.

For all of our sakes, progressive Conservative ideas must prevail, and our capital remains crucial to winning the battle of ideas elsewhere in the UK. The much-vaunted CCHQ ‘London Unit’ has failed to make any impact in unifying our campaign to win back London. Conservatives on the ground have to keep quietly fighting our separate guerrilla wars against the Labour monolith, and to keep making the arguments that make sense. But we have one great advantage over Labour, which we should never lose sight of: we have a set of ideas and values that actually work, and that benefit all Londoners whatever their background.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Progressive Conservative reformers 3) Thatcher – and the sale of council houses to their tenants

How better to follow Jeremy Corbyn’s speech yesterday than by turning to the great Conservative leader who embodied everything he hates?  But who nonetheless did more than he has ever done to bring about – in the words of Labour’s most left-wing manifesto in modern times – “a fundamental and irreversible shift in the balance of power and wealth in favour of working people and their families”.

We refer to the sale of council houses to their tenants which, over time, gave millions of people a stake in the system that they didn’t have before.  Thatcher’s radical move bust one of the barriers between labour and capital.

Not that all Tories always supported the policy.  Some believed that those who had worked hard to buy their own homes would jib at others being able to do so with a discount.  (The same objection is raised today whenever it is proposed to give social housing free to tenants.)  According to Andrew Gimson, Thatcher herself was originally one of them, and was first commandeered into proposing the policy by her then boss, Edward Heath.

So all credit to Horace Cutler, a Tory leader of the then Greater London Council, who sold some council homes early; to Peter Walker, and Michael Heseltine, who insisted on the discounts.

Heath was duly replaced by Thatcher – who swung behind the policy and made it happen, thus helping to fulfill Antony Eden’s original vision of a property-owning democracy.  The flaw in the plan’s execution was the non-replacement over time of the stock of council housing.  But that does not in itself detract from the success of the signature policy of the Thatcher years.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Ryan Bourne: To help grow prosperity, let’s focus on people and not places – such as towns

Ryan Bourne is Chair in Public Understanding of Economics at the Cato Institute.

Stian Westlake describes it as the “Strange Death of Tory Economic Thinking”. Conservatives have ceased telling an economic story about why they should govern, and how. Sure, there’s still the odd infrastructure announcement, or tax change. But, since Theresa May became leader, the governing party has shirked articulating a grand economic narrative for its actions.

This is striking and problematic. From Macmillan to Thatcherism to deficit reduction, the party’s success has coincided with having clear economic agendas, gaining credibility for taking tough decisions in delivering a shared goal. But, arguably, deficit reduction masked a secular decline in interest in economics. David Cameron and George Osborne, remember, wanted to move on to social and environmental issues until the financial crisis and its aftermath slapped them in the face.

Now, with the deficit down, economics is in the back seat. Fiscal events are low key and economic advisors back room. To the extent the dismal science is discussed, it’s as a means to other ends, or a genuflect to “Karaoke Thatcherism.”

In short, I think Westlake is right: the Tories do not have an economic story and, post-Brexit, it would be desirable if they did. So we should thank both him and Sam Bowman (formerly of the Adam Smith Institute), who have attempted to fill the vacuum. In a rich and interesting new paper, the pair set out to diagnose our key economic ailments and develop a Conservative-friendly narrative and policy platform to ameliorate them, even suggesting reform of the Right’s institutions and think-tanks in pursuit of the goals.

Such an effort deserves to be taken seriously, though not everyone will agree with their starting premises. It is assumed, for example, that Conservatives believe in markets and want to maintain fiscal discipline, which bridles against recent musings from Onward or thinkers such as David Skelton.

But, again, the key economic problem they identify is incontrovertible: poor economic growth. Weak productivity improvements since the crash have been both politically and economically toxic, lowering wages, investment returns, and necessitating more austerity to get the public finances in structural order. And the nature of modern innovation, arising from clusters and intangible assets, means that growth that is experienced isn’t always broadly shared.

Their agenda’s aim then is to achieve both concurrently: maximize the potential of the economy by taking policy steps on planning, tax policy, infrastructure, and devolution, to increase investment levels, allow successful cities and towns to grow, and to connect “left behind” places to local growth spots through good infrastructure. None of their ideas are crazy. Indeed, I would support the vast majority of them.

And yet, something bothered me about their narrative. In line with the current zeitgeist, they too discuss “places” and their potential, as if towns and cities are autonomous beings. My fear is this focus – shared by those who want to regenerate “left behind” areas – creates unrealistic expectations about what policies can achieve in a way that undermines a pro-market agenda. Importantly, it warps what we should really care about: “left behind” people, not left behind places.

A people-centred narrative recognises that just as firms fail in the face of changing consumer demands and global trends, so high streets, towns, cities, and even regions will shrink too. As Tim Leunig once said, coastal
and river cities that developed and thrived in a heavy manufacturing, maritime nineteenth century world might not be best placed to flourish in a service sector era of air and rail.

A true pro-market policy agenda would admit -and that’s ok. Or at least, it should be, provided we understand that raising growth and sharing prosperity requires adaptation, not regeneration. That means removing barriers for people either to move to new opportunities or have control to adapt their situations to ever-changing circumstances. This might sound Tebbit-like (“get on your bike”), but really it’s just saying policy must work with market signals, not against them.

Today though, interventions actively work in a sort of one-two-three punch against inclusive growth and adjustment. First, we constrain the growth of flourishing cities. Tight land use planning laws around London, Oxford, and Cambridge contribute to very high rents and house prices, and prevent these places benefiting from growing to obtain thicker agglomeration effects.

This contributes to the “left behind” scandal, but not in the way people imagine. When rents and house prices are higher in London and the South East and we subsidse home ownership or council housing elsewhere, it’s low productivity workers from poor regions that find it most difficult to move given housing cost differentials. As a result, they get locked into poorer cities and towns that would otherwise shrink further. That’s why Burnley, Hull and Stoke are the most egalitarian cities in the country, whereas prosperous London, Cambridge and Oxford are the most unequal, even as inequality between regions has intensified.

Having restricted people’s mobility through bad housing policy, we then impose one-size-fits-all solutions and subsidies which dampen market signals further. National minimum wages, fiscal transfers, national pay bargaining, and more, might be designed to alleviate hardship, but they deter poorer regions from attracting new businesses and industries by trading on their market cost advantages. Then, to top that off, we compound the problem further by centralising tax and spending powers, preventing localities from prioritising their spending and revenue streams to their own economic needs.

Now, as it happens, Bowman and Westlake’s policy agenda is perfectly compatible with assisting  “people” rather than “places,” precisely because it’s market-based. They advocate planning liberalisation, a flexible right to buy, and stamp duty, all of which would improve labour mobility. They prioritise infrastructure spending based on benefit-cost ratios, making investments more profitable with sensible tax changes, and devolving more transport power to regions and localities. All, again, will help facilitate areas adapting to changed economic conditions, rather than reviving Labour’s failed top-down regeneration attempts.

But pitching this as a city and town agenda still risks creating the false impression that the net gains from “creative destruction” nevertheless can be achieved without the destruction, and that all places can thrive in the right policy environment.

One can understand why they framed it in this way. Their aim is to persuade the party and its MPs of their platform. Anti-market commentators would call them fatalistic and “abandoning” places if they acknowledged the downside, as if facilitating more free choice amounts to design.

Successful past Tory economic narratives, though, willingly acknowledged hard truths. Deficit reduction entailed tough choices to curb spending. Thatcherism entailed making the case for letting inefficient industries fail. If a new Tory vision is serious about raising productivity growth and spreading opportunity for people, it will have to confront the inevitable market-based adaptation for some places.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

McVey makes wider home ownership central to the Tory mission again

Esther McVey used to be the Work and Pensions Secretary until she resigned last year. She is now back in Government as the Minister of State for Housing and Planning. Supposedly, that is a demotion. But surely her new job is trickier and more important. For all the controversy about the welfare reforms, they are in place and proving effective. When it comes to wider home ownership, that central Tory mission, there have been some tentative signs of progress. Yet the fundamental problem with the housing market remains. It isn’t really a market. Supply is artficially constrained by the state. So increased demand just pushes up prices. The planning system has also managed to ensure that usually what new building is allowed looks awful. This understandably strengthens the anti-development lobby, the NIMBYS, making the shortage even worse. Solid economic growth would help with many of the Government’s objectives – being able to afford increased spending on public services while also cutting tax. However, the experience of recent decades has been that periods of growth might have resulted in an abundance of many things this has not included homes. While everything else has become more affordable, housing has become less affordable.

In her first speech as Housing Minister, last week in Newport, McVey was clear that “we have to tackle this Great British housing building problem.” She said:

“Too many people feel that vital link between hard-work and owning their own home is broken. And when that link is severed, social mobility and opportunity falls away.

For so many people in our public sector, like our nurses and our teachers, like our police, owning their own home feels like the dream that has been taken away from them.

This is not right, they are the backbone of our country. They deserve a home of their own and they are looking to us to see what we can do. They are looking to us to fix it like we look to them to teach our kids like we look to them when we need healthcare, to look after us. They’re looking to us now to return that favour and look after them.

So, that’s 300,000 more homes a year to build. Each and every year.

Now we’re getting closer to that target – we’re building more, more than before. In fact last year we built more homes than in every year bar one in the last 31 years.

In Greater Manchester, the number of extra homes built is rising by more than 12 per cent.

In Birmingham, it’s rising by 80 per cent.

Only in London, have the number of new homes fallen.

While the trend is heading upwards, I’ve found there’s still serious barriers stopping that progress unnecessarily, and we need to understand what those barriers are, understand what is getting in our way so we can remove them.

We also need to focus on Brownfield sites – what are we doing there? Are we doing enough there? Are we building enough homes there? Regeneration must be something we should be most proud of, turning round, I call it, unloved land.”

If we accept that the issue is supply rather than demand, then it follows that the “Help to Buy” scheme won’t work. It will certainly have helped some people – but overall have pumped up prices even more and so been unhelpful to others. Theer was a hint in McVey’s speech acknowledging this:

“There is a limit to what Government can do, for example, Help to Buy is precisely that. It is helping people to buy, it is not helping somebody to make a profit, it is not helping to increase the prices of property. It is about helping people to buy.

“So this Government will be vigilant about what is working, keeping an eye on our goal. That is a shared goal, helping people into a home and into home ownership.”

There were some specifics concerning the modest changes announced so far:

“We’ve looked at ownership models, so making Shared Ownership more accessible for working families. We’ve started that already so buyers can have a staircase of one per cent increases rather than ten per cent leaps.

 We’re going to look to expand Shared Ownership, supporting it in different ways, taking out what we hear to be the difficulties of it, the expense of it. It shouldn’t be unfair for those trying to get onto the housing market.

And Rent to Buy, so people can rent knowing that they are going to buy, knowing that they’ve got a bit of breathing space, maybe it’s in five years, maybe it’s in ten years, but they will get to own that property –  so they can plan, knowing they have the certainty of getting a deposit and getting that house.

 And Right to Build, so many places around the world have far more people building their own homes, so we’re going to be there, whether its support for Right to Buy or Right to Build.”

This was a speech which championed home ownership:

“A dream that the vast majority of the public still have and continue to have.

And why is that? It’s about having a stake in society, it’s about having security, it is about aspiration, it is actually about freedom. It’s about financial security, and it’s about safety for you and your family and it provides people with a real stake in their community.”

She also balanced the statistics about recent achievements by saying:

“It is a scandal, possibly the greatest scandal over the last 30 years that we’ve had a shortage in houses. And that has led, as we know, to a rise in renting and costs, and to a fall in home ownership which has destroyed the aspiration of a generation of working people.”

So this was her starting point. A statement of intent. After the depressing messages from some of her predecessors, this is welcome. I look forward to the Party Conference and the election manifesto to see if it will be followed by the specific radical policies required. Mine would include a much bolder offer on shared ownership, an end to state land banking, zero VAT for the renovation of old buildings, and delivering on the right to buy for housing association tenants which has already been promised. And above all, to have a presumption in favour of allowing development (including in the Green Belt), provided it adhered to local design codes that had popular consent, which could give confidence that what went up would be beautiful.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Neil O’Brien: Corbynomics – and why it means that your house, business and savings don’t really belong to you,

Neil O’Brien is MP for Market Harborough.

What is Corbynomics? It goes without saying that it’s a much more extreme economic programme than Labour have ever had before. And that government will spend, tax and borrow more. But Labour have a lot more damaging, half-baked and dangerous ideas.

No-one is thinking about them at the moment, but the scary thing is that within weeks these ideas could be affecting your house, your pension and your job.

For me, the most frustrating thing is that Labour have identified various important issues, but their proposed “solutions” would make matters worse. Let’s look at a couple of examples.

Seizing 10 per cent of all large companies’ shares

Lots of people, including me, worry that current corporate structures create pressures that make managers behave in a short-termist way, squeezing investment to hit short term profit targets and dragging down productivity growth. I’m concerned that publicly quoted firms are beholden to increasingly transient shareholders, interested in immediate returns. They certainly invest far less than privately owned firms who can take a longer-term view.

But my answer to this would be to change the tax treatment of investment, and increase capital allowances so that there’s no disincentive to invest.

Labour’s answer, in contrast, is to forcibly transfer 10 per cent of all companies shares to create a sort of employee-ownership-at-gunpoint.

This is a terrible idea, which would make investment into the UK dry up overnight. After all, if government can steal ten per cent of your shares, what’s to stop them coming back for the rest? Labour protest that the shares are not being stolen – just given to the workers. But that’s a lie, as they also propose that a Labour-run Treasury would take the great majority of the dividends that those shares attract. At the moment, these are owned by savings and pension funds – so the money is ultimately coming out of your pocket.

The total value of the shares stolen by government would be around £300 billion, according to the Financial Times. For comparison, raising the basic rate of tax by one per cent raises £4.5 billion a year, so you can see what a vast tax grab this would be.

Forcing people to sell their properties at a price set by government, and control rents

There are major issues about the balance of rented and owner-occupied property in Britain. We had a long period when the number of properties being moved into the rent-to-buy sector was outstripping the number built, meaning owner occupation fell dramatically. Between 1996 and 2016, the home ownership rate among middle income people aged 25-34 fell from 65 per cent to 27 per cent.

However, in 2015 the Conservative Government reformed the tax treatment of rent to buy and second homes, and in the years since we have seen homeownership rebounding upwards, with both ownership and the rented sector growing in a more balanced way. There are lots more things we could do to grow home ownership.

Corbynista Labour doesn’t really believe in home ownership. They are nostalgic for the world of the 1970s, where around two thirds of households in places like Islington lived in social housing. But they know ownership is popular.
So they have announced the “private sector right to buy”. This will give private tenants the right to make their landlords sell their properties to them at a discount.

In an interview last week, John McDonnell made it clear that government would set the price: “You’d want to establish what is a reasonable price, you can establish that and then that becomes the right to buy,” he said. “You (the government) set the criteria. I don’t think it’s complicated.”

It’s not complicated. But it is deeply unfair. It would be a retrospective raid on people’s assets. People, including some who are not so rich, have invested in property under certain rules, and would have their savings ripped off them, while other people who invested their money in other things would not. This is arbitrary and unreasonable and would I’m sure be challenged in the courts.

Labour would also set rental prices, promising in a recent document that “There should be a cap on annual permissible rent increases, at no more than the rate of wage inflation or consumer price inflation (whichever is lower).”

This is unworkable or will lead to under investment in rented properties. Why spend lots doing up a flat if you can’t charge more for an improved property? We would quickly be heading back to the 1970s, when there wasn’t enough rented accommodation to go round, and conditions were squalid because of rent controls.

Sectoral wage bargaining

With the National Living Wage, the Conservatives have introduced one of the highest minimum wages in the world. For the lowest paid, the National Living Wage plus the cuts in taxes for lower paid people mean that they take home £4,500 more than they did under the last Labour Government – while employment has soared to a record high. We should be really proud of our record.

However, the National Living Wage is still set by an independent body, and as percentage of average pay in the market, so there is a sensible link to what businesses can afford without sacking people.

In contrast, under Labour politicians would just set rates directly. Labour have also pledged to “roll out sectoral collective bargaining”. Labour said it would “fix the going rate” in each industry and “set fair conditions” for the sector. This would represent an end to the system whereby unions negotiate company by company and, instead, give them power effectively to set national standards on pay and conditions. A new government unit would work with unions to bring firms into line.

This means that if politicians or trade unions decide your business is part of a particular “sector” (a pretty subjective question) then you would be in line for a change in wages which your business might simply be unable to afford. The scope for union bullying and endless court cases and demarcation disputes is obvious. In the car industry, wages are high, so a sectoral wage would be high. If I make plastic bits for the car industry but also other industries, is my business in or out of the automotive sector?

Rebecca Long Bailey has also said that “Labour will also legislate to reduce pay inequality by introducing an Excessive Pay Levy on companies with staff on very high pay.” There is no detail on what the rules will be, but the idea of having wages directly controlled by Jeremy Corbyn is likely to deter inward investment.

What do these ideas have in common?

When New Labour left office, a million people had been thrown on the dole, we’d had the deepest recession since the second world war and government was borrowing more than at any time in our whole peacetime history. In the final year alone, they borrowed £7,900 for every family in Britain.

And that was New Labour. Imaging what the country would look like after Corbyn and McDonnell.

Where Corbyn’s ideas really differ from previous Labour leaders is that he doesn’t really believe in the rule of law. Your house, your business, your savings: all these things don’t really belong to you, in Corbyn’s eyes: you have them only as long as the government suffers you to have them, and they can be retrospectively taken away if he sees fit. In the week Robert Mugabe died, we’ve seen underlined just how important the rule of law is. But under Corbynomics, it would be the first casualty.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Home ownership is managing a modest recovery

Part of the story of the last General Election was how many younger voters, with the aspiration to become home owners, decided to vote for a Marxist-led Labour Party in frustration at the difficulty in seeing their dreams realised. It might seem an odd protest, but if all you have is a hammer, everything looks like a nail. Has anything changed during the last couple of years? Not fundamentally. As the Prime Minister might put it, there has been a period of “dithering and delay” regarding housing policy under his predecessor, as on other issues.

Whisper it softly. While there has been no breakthrough, there has been some modest, incremental progress. Property prices have been becalmed – falling slightly in London, rising roughly in line with inflation elsewhere. At the same time, we have seen real wages rise. It follows that this makes buying a home more affordable (or less unaffordable) than previously. The latest English Housing Survey says:

“In 2017-18, there were an estimated 14.8 million households who either owned their home outright or were buying with a mortgage. This represents 64 per cent of all households. More than half (53 per cent) of owner-occupiers (and 34 per cent of all households) own their home outright.”

A year earlier, the figure for home ownership was 63 per cent. A year before that, it was the same.  Home ownership peaked at 71 per cent in 2003. An increase from 63 per cent to 64 per cent might be just margin of error territory, though the sample of 13,000 for the survey is pretty hefty. Or it might be the start of a trend. The other guide is the Dwelling Stock Estimates. That is also mildly encouraging in terms of the latest data:

“The proportion of dwellings in owner-occupation increased steadily from the 1980s to 2002 when it reached its peak of 69.5 per cent. Since then, owner-occupation gradually declined to level out at 62.4 per cent in 2015 and 2016, increasing slightly to 63.2 per cent in 2018.”

If we already have a slight trend in place and we can notch up a percentage point each year, then after a few years that becomes rather important. If the radicalism of the new regime sees bold reforms such as the easing of planning restrictions and a reduction in Stamp Duty then that would be further encouragement.

There is a caveat. These figures are for households not individuals. After children grow up, they are staying at home with their parents for longer. If the son of a home owning couple is still in situ, aged 32, unable to afford to rent or buy, then he is in an “owner-occupied” property. That does not mean it is a satisfactory outcome. It may be very annoying for all concerned.

What about the expectations of those renting that they will one day be able to buy?

“In 2017-18, 25 per cent of social renters expected to buy a property at some point in the future, down from 30 per cent in 2016-17. A greater proportion of private renters expect to buy – 58 per cent, unchanged from 2016-17.”

In many ways, the situation for the social renters is where it is easiest for the Government to make a difference. The promise to extend the right to buy to housing association tenants, on equivalent terms available to council tenants, has yet to be fulfilled. The Conservatives need to get on and deliver it. There must also be a right to shared ownership brought in.

Boris Johnson, speaking at the Conservative Home fringe meeting at the Party Conference last year, recalled being a young reporter on the Wolverhampton Express and Star and being sent to see a couple who were complaining about damp. He said:

“It was a terrible scene. They were sitting there and with the heating on full blast and a baby crying, and the condensation dripping down the window, and there were these great black spores all over the wall. The chap was in his socks in an armchair and in a state of total despair. He was worried about the baby’s cough – which was getting worse. The council wouldn’t do anything, and he felt he couldn’t do anything – because it was not his property, and I could see that he felt somehow unmanned by the situation. And I felt very sorry for them both – because they were total prisoners of the system.”

That remains the reality. It is no solution to make speeches about how “social housing is a force for good.” Overall it has been disastrous – although much of the early Housing Association building was attractive, thanks to philanthropists with a sense of pride in the legacy they were providing. Nor is it much use to patronisingly tell people trapped in the system that they simply mustn’t feel any stigma about such tenure. People tend to spot that Conservative politicians telling them how splendid social housing is, have generally taken the opportunity of home ownership for themselves and their families.

So we should not despair. Home ownership is not a lost cause. It should be embraced by Conservatives as a moral as well as a political mission. The young are just as ambitious to achieve it as were previous generations.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Adam Honeysett-Watts: After three years of gloom under May, it’s time for fun with Johnson

Adam Honeysett-Watts is Director of Conservatives in Communications and works in the financial technology sector. 

Before this leadership election got underway, I wrote that the next leader must be able to tell the Tory story – of aspiration and opportunity – and identified Boris Johnson as the person best-positioned to do that.

Having previously supported David Cameron and then Theresa May, I like to think I back winners – at least, in terms of those who reach the top. That said, while the former will be remembered for rescuing the economy – while giving people the power to marry who they love and an overdue say on Europe – the latter, much to my disappointment, has no real legacy. Johnson should avoid repeating that mistake.

His final column for the Daily Telegraph, ‘Britain must fire-up its sense of mission’, was jam-packed with the kind of Merry England* (or Merry UK) optimism that we experienced during the Cricket World Cup and that the whole country needs right now: “They went to the Moon 50 years ago. Surely today we can solve the logistical issues of the Irish border”. Quite right.

You’ve guessed it, I’m chuffed that Conservative MPs, media and members supported Johnson’s bid to become our Prime Minister. I’m looking forward to May handing him the keys to Number Ten and him batting for us after three, long years of doom and gloom. Sure, optimism isn’t everything – but it can set the tone. A detailed vision must be articulated and executed by a sound team.

Whichever side you were on before the referendum (or are on now), in the short term, we need to redefine our purpose, move forward with our global partners, unite the UK – and defeat Corbynism.

Mid-term, we should invest further in our national security and technology, improving education and life chances and encouraging greater participation in culture and sport, as well as boosting home ownership. Plus the odd tax cut here and there would be well-advised.

However, we must not put off having debates – for fear of offending – about controlling immigration and legalising drugs, and about funding for health and social care, as well as protecting the environment, for these issues matter and will matter even more in the future.

We should also avoid the temptation to ban political expression, alternative media and sugary foods, and celebrate instead free speech, press freedom and the right to choose.

Again, I look forward to Johnson peddling optimism and hope that people get behind him, because, ultimately, he will write our next chapter – and if we jump onboard and provide support, much more can be achieved by us all working together.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Chris Philp: Cut Stamp Duty – and unleash a new Home Ownership Revolution

Chris Philp is has served as PPS in the Treasury and MHCLG, and on the Treasury Select Committee. He is MP for Croydon South.

One of the signal achievements of the Thatcher Government was the home ownership revolution. Millions of people were able to buy their own home for the first time – through right-to-buy and a more dynamic housing market generally. Sadly, much of that good work has been undone in the years since.

Home ownership rates have fallen from a high of 71 per cent in 2005 down to 63 per cent today. The falls are especially acute amongst those in their 20s and 30s, where home ownership rates have almost halved since the early 1990s. No wonder we have trouble getting younger people to vote Conservative.

Home ownership is an inherently beneficial thing. Those who own their own home enjoy secure tenure and lower housing costs than those renting. Over the long term, it is financially better to own rather than rent – even if house prices do not rise faster than inflation. And owning a property gives people a real sense of a place they can call home. It is no surprise, then, that 86 per cent of the public aspire to own their homes. Given only 63 per cent actually do, around a quarter of our fellow citizens wish to own their own home but do not. We should help them.

Stamp duty is a major barrier to buying a home. It is a cash cost that cannot be mortgage-funded. Given that up-front cash costs are the biggest impediment to buying, this is serious. Stamp duty acts as a barrier for buyers of all kinds, which means housing stock is not freed up by downsizers and there are negative effects on labour mobility.

It should be a legitimate – and popular – objective of public policy to help prospective home buyers. In the last ten years, owner occupiers have been crowded out by financial investors and second home buyers, often from overseas, who have superior financial firepower. They currently make up around a quarter of all residential sales, and even more of new build sales. The Government has already recognised this by abolishing stamp duty for first time buyers purchasing properties under £300,000 and cut it by £5,000 for those buying at under £500,000.

We need to do more. As I and Guy Miscampbell set out in a new report for Onward, the Government should:

  • Abolish stamp duty entirely for all purchases of a main home under £500,000.
  • Halve current rates of stamp duty for purchases of a main home over £500,000.

This would abolish stamp duty for nine out of ten owner-occupiers and save a family buying an average priced London home £13,000, or half of a five per cent deposit. The cost of this policy is £3.3 billion. But it would help more people buy their first home, and make moving house – for a new job, to downsize or to upsize – much easier. For the most expensive properties, where stamp duty is currently charged at a marginal rate of 12 per cent, it is likely that transaction volumes are being suppressed. Halving stamp duty for those properties should result in a positive Laffer effect, due to an increase in transaction levels.

But any new policy should be fiscally responsible. To fund the £3.3 per year billion cost, I propose a number of smaller tax changes, where there is broad public support for taxation and a clear case for action:

  • Introduce a one per cent annual tax on the value of homes left empty for more than 6 months in a year, raising £645 million.
  • Increase the current three per cent stamp duty surcharge on second homes and investment properties to 5 per cent, raising £790 million.
  • Introduce a further three per cent stamp duty surcharge of non-UK resident buyers of residential property, raising £540 million.
  • Introduce an extra higher band of council tax at a £1,700 per year council tax premium for the 0.4 per cent most expensive properties, raising £173 million.
  • End all council tax reliefs for vacant and second home property, raising £75 million.
  • Create a new eight per cent (up from five per cent) stamp duty band for the portion of commercial property purchases over £1 million, raising £682 million.
  • Levy stamp duty on residential properties transferred by selling the company that owns them via transparent ownership rules (which would also help combat money laundering), raising £175 million.
    Double the Annual Taxation on Enveloped Dwellings, raising £140 million.

These measures taken together will help first time buyers, down sizers, upsizers and people moving home to help their job. It will tax overseas investors (usually from the far east) who are treating UK homes as a financial asset and crowding out first time buyers with their superior financial firepower.

Tilting the playing field back towards UK-resident first time buyers and owner-occupiers is the right thig to do. The new Government should use the coming autumn budget to do exactly that.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Tom Tugendhat: The last two men left standing in this contest must resist the temptation to slug it out

Tom Tugendhat is Chair of the Foreign Affairs Select Committee, and is MP for Tonbridge and Malling.

In a contest which has been framed around personality, it is striking how many ideas have been generated by the Conservative leadership contest.  Each of the ten candidates original candidates had something to say. Each has championed a new vision of Britain, and each has given Conservatives plenty to think about.

It’s also showcased some good news about how the Conservative Party is changing. Which other party in any other country could boast a contest that included a television presenter, two newspaper columnists, an entrepreneur, an old-school adventurer, a second generation Muslim immigrant, or the son of a Jewish refugee? Not as tokens, but each arguing on merit their own cause as an advocate of an idea.

I backed Michael Gove’s determination to do everything he can to strengthen our United Kingdom and make this country a cleaner, greener place to live. But there are parts from other campaigns that were inspiring. I love Esther McVey’s promoting of Blue Collar Conservatism that has underpinned the Conservative movement for generations and Dominic Raab’s focus on home-ownership and cutting taxes for the lowest-paid.

Andrea Leadsom’s defence of EU citizens who live in the UK and the need to give them (my wife included) certainty about their future status is a proposal I completely back and Matt Hancock’s continued emphasis on mastering cutting-edge digital technologies as the key to our country’s future prosperity is one I have been pushing for since I discovered that parts of Kent are less well connected than Kabul or Khartoum.

At a time when faith in politicians is waning, Rory Stewart showed us just how we can rebuild trust not only through outreach but by talking about the real issues that change people’s lives.

And Boris Johnson? What isn’t there to say about him? He has picked up school places and tech infrastructure, taxes and the living wage and, closest to my heart in our in a time of educational separation – apprenticeships. That, along with his ability to animate the faithful make his contribution so powerful.

But he’s not alone. No one could be unmoved by Sajid Javid’s back story and determination. His pledge to recruit 20,000 more police is a welcome return to the values many expect of us – protecting those most in need. And as chairman of the Foreign Affairs Committee, I’ve long admired Jeremy Hunt’s ability to master the widest of briefs and understand the details that drive change in our world. His commitment to fund our armed forces and diplomacy properly is also hugely welcome.

The range of these ideas gives me great hope for the future. Partly because they confound the lazy allegation that we have run out of them. Partly because none of them need be mutually exclusive. And partly because Brexit is the biggest shift in UK policy in generations with massive implications for everything from the NHS to housing policy: there is a massive opportunity for creative thinking.

While there is no shortage of ideas, there has been a shortage of leadership. We need a Prime Minister now who will take us through Brexit and confront the challenges beyond. The 2016 referendum, and the three years since our vote to leave, have revealed many profound political problems – common to many other countries – that we now have both an opportunity and a duty to address.

The poorest have felt the impact of the financial crisis hardest, while the benefits of our economic growth have been imperceptible to too many: especially those who do not live or work in our big cities. We have to build beautiful new housing that reflects the way we live today. We need to ensure that our education system is focused on endowing our young people with the skills that translate into career security in a world which has already been transformed by internet connectivity and will be further by automation and AI. Finally, everything we do must be sustainable. The policies we pursue today must not imperil our children’s future.

The temptation for the last two men left standing in this contest will be to slug it out. There is a real danger that the race becomes acrimonious and divisive.  We are at our best as a country when we are unified. I know from my time chairing the committee that has scrutinised both Foreign Secretaries that each man is above this.

Let us spend the next week scrutinising these two potential leaders. Then let’s unite behind whoever wins to deliver Brexit and a compelling vision of the future for this great country.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com 

Eddie Hughes: Why I am fighting for fairness for leaseholders

Eddie Hughes is the MP for Walsall North.

The leadership election and the focus on resolving the Brexit impasse are rightly at the forefront of everyone’s mind at the moment, but beneath the Brexit surface life is going on for people and there are many pressing issues that can’t wait. Housing is one of them.

Before entering Parliament, I worked as Deputy Chief Executive of a specialist housing provider in the West Midlands, and Chairman of whg, a large housing association in the West Midlands. I have seen first-hand the importance of getting housing policy right – such as the government’s announcement in October 2017 that the Local Housing Allowance cap would not apply to supported housing or the social housing sector

Conservatives nationally and locally are beginning to clean up old, contaminated industrial sites which is unlocking land for housing development. This takes time, but is the right thing to do, and protects valuable green spaces from being concreted over.

However, it’s not just about building more houses, there are many problems in the housing market that need resolving now. Leasehold is just one example.

Imagine for a moment, you own a lovely one or two-bed apartment or perhaps even a recently built house. You’ve lived there quite happily for a few years, but you decide it’s time to move – maybe because of schools, for work – or perhaps to move up the housing ladder. You’re primed and ready to go. But the estate agent asks for a copy of your leasehold agreement. And there, in the small print, you get hit with the fact that you cannot sell your property. You’re trapped. Thousands of people across the country are in this position and it cannot be right.

This feudal ‘leasehold ground rent scandal’ needs attention right now. In many cases, developers have created leases with ground rent clauses that have since fallen out of favour with lenders, leaving owners stuck with an unsaleable property because buyers can’t get a mortgage. This isn’t the fault of the leaseholder who couldn’t possibly have foreseen the problem when buying.

In some cases the ground rent doubles every ten years, in other cases it doubles just once, and there are reports of lenders refusing to lend on what they deem as unreasonable or onerous ground rent clauses. Some won’t lend if the ground rent exceeds 0.1 per cent of the property value at any point during the lease. Leasehold campaigners argue that there are close to 100,000 people affected by terms that leave them with ground rent in excess of 0.1 per cent of the property value. I would argue that such circumstances are onerous.

The result is an unsaleable property and in many cases, the developer is long gone having sold the freehold on to a distant investment company. They have, of course, made their money twice – not only from the sale of the leaseholds in the first place but by selling on the freehold.

Now there’s nothing wrong with a freeholder taking a reasonable ground rent, in my view, but when that ground rent becomes onerous and stops someone from being able to sell their home – that’s when it becomes a problem. The rights between freeholder and leaseholder need to be redressed. That’s why I’m proposing a Private Members Bill in the Commons this week.

The result of developers selling on the freehold to investors is that some freeholders are remote, uninterested in helping out their leaseholders, or those that do are charging unfair fees and legal costs for what should be a very simple solution. I know one such scenario where there is a £180 charge just to discuss terms with the freeholder.

My Bill simply proposes the creation of a legal obligation for freeholders to grant a quick and simple lease variation to leaseholders where ground rent prohibits resale. Secondly, it’s important that ground rents are capped at 0.1 per cent of the property value. If the Bill progresses, there will be an opportunity to shape the clauses, especially in light of the excellent MHCLG Select Committee report on problems in the leasehold market.

Systems and institutions are supposed to serve the public and I hope we can all agree, as Conservatives, that we can’t have people unable to sell their properties. Drastic and immediate action is required – and it is required now. It’s time to show people we are on their side.

Real Estate, and Personal Injury Lawyers. Contact us at: https://westlakelegal.com