Beyond Generation Rent: The Bigger UK Property Problem

It’s recently been reported in The Times that couples often stay together in rented accommodation long after they have stopped having a relationship. This is of course because they can't afford to move out, at least not if they want to live in a similar fashion to that enjoyed by sharing the costs of one property and the supermarket shop. But of course this isn't just a Generation Rent issue. I know quite few couples who are similarly stuck in the same situation, but paying their own mortgage and not their landlords. They could sell and split the profit/equity (if there is any - its not guaranteed these days) and then try to find something that is half decent, on much higher interest rates and not much to put down as a deposit.

My point is that it’s very fashionable to think renters have all the problems, but the problem of housing in the UK is actually much bigger. From the late nineties, with a few minor blips until about 2014, the property market grew steadily and often steeply upwards. Massively out performing salaries, and low interest rates, following the 2008 credit crises, allowed not only people to become used to severely unrealistic interest rates of 1%, and see this as the norm, but also to hugely over extend what they could afford if rates went up. Which they did. A lot. This means a lot of people now have almost no disposable income and there are fewer buyers if they want to sell, because no one else has any money either!

Not to be too political, but the current Labour government is so utterly anti-wealth and so clearly inept with the nuances of the property market, that they have made things much worse, causing a flight of people who do have money, and tinkering (or rather riding rough shod), over the lettings market by making it even more unattractive for landlord, with the Renters Reform Bill. The result will be, and I guarantee this, a massive hike in rental prices and a much harder environment for tenants. The reasons are many and I won't go into it here, but the crux of it is fewer landlords, fewer rental properties, higher prices. Frankly the Labour government is not only to blame. The last so called Conservative Party has much to be blamed for too. George Osbourne & Liz Truss - we see you.

So what can be done? Big change is needed. My recommendations: scrap inheritance tax for Non Doms and everyone else, stop bashing small businesses, do not ban Section 21, give tax breaks back to landlords and build more affordable property in the build to rent sector. Make Stamp Duty Land Tax a flat 5% across the board, get some bobbies back on the beat that actually fight criminals and not victims and stop demonising wealth and success.