Phil Spencer: 'I would really like to see the situation improved for landlords'
London's housing market is stuck in a vicious cycle of unaffordability, red tape, and inertia, and the Government must make controversial tax decisions to liberate it, according to one of the UK's best known property pundits.
Phil Spencer , a qualified surveyor and co-presenter of Location, Location, Location and Kirstie and Phil's Love It or List It, would like to see next month's budget used to create much needed ripples of movement within the market after a year when the number of homes sold remained at a near-record low and prices fell by half a per cent according to the latest UK House Price Index.
"There have been a lot of uncertainties — the election, interest rates — and people have been holding off their plans while they see how the situation plays out," Spencer told Homes & Property.
To fix matters his first piece of advice to Rachel Reeves, Chancellor of the Exchequer, is to cancel proposals to hike the amount of Capital Gains Tax levied on rental properties when they are sold. Mere rumours of the plan have already had a dramatic impact .
According to Rightmove, almost one in five of homes currently for sale on the site has previously been rented as landlords — possibly the least popular group of property owners in the market — rush to get out of the sector before the change occurs.
"I worry greatly unless landlords are incentivised about what will happen to society." Phil Spencer"It is massively reducing the number of properties available for rent and that is massively increasing the cost of rent. It is a vicious circle. I worry greatly unless landlords are incentivised about what will happen to society. We will get into a pickle where there isn't enough private rented housing to go around.
"I would really like to see the situation improved for landlords ," he said. "They have to make buy to let an attractive proposition."
The other people Spencer would like to help are an equally controversial group — downsizers . These mainly members of the Baby Boomer generation are currently sitting on vast amounts of property wealth and plenty of extra space.
According to census data from the Office for National Statistics, almost nine million homes in England and Wales have at least two spare rooms, while more than eight million have one spare room, adding up to more than 26 million spare bedrooms in properties across the UK.
Many of these owners can't bear the thought of selling a home they may have owned for decades. "Our homes are so much more than homes," said Spencer. "They are our privacy, our sanctuary, they are where we bring up our children, and they are filled with our treasures and things that we love. "They are very emotive and people get very tied to them."
Spencer believes Labour's 1.5 million housebuilding target is "unrealistic"ESBut Spencer suspects that a Stamp Duty break for downsizers — who many believe have amassed quite enough wealth in their homes to afford to pay the tax — could trigger important conversations and free up homes.
"If downsizers were incentivised it would smooth the way," said Spencer, who recently met residents at two bespoke "later living" developments by Riverstone Living , to see how a combination of central London locations plus hotel style amenities and events can persuade people to downsize.
"They do in their heart of hearts acknowledge that their big, roomy house no longer suits and is likely to become much harder to live in as the years go by. But change is hard, and downsizing gets harder. It is a big decision and I recommend people make this decision when they are in fine fettle rather than in a hurry when the chips are down.
"When done in a considered fashion and at the right time — which is almost as early as you dare — it can be invigorating, exciting."
Encouraging the over-housed to move to smaller properties could provide an alternative to the mass house building the Government is currently proposing. One of Keir Starmer's first acts after taking office was to announce that all English councils will be given mandatory housing targets with an aim of building 1.5 million more homes .
"It would be wonderful, but I think that it is unrealistic," said Spencer.
His housing wish list also includes a thorough review and reform of the slow, complicated, and unwieldy planning system, as well as of the slow, complicated, and unwieldy conveyancing process. "Chains are causing more hassle nowadays than ever," he said.
And, of course, he hopes to see more support for First-Time Buyers priced off the ladder, although not the mooted return of Help to Buy . The scheme gave buyers Government equity loans of up to 40 per cent towards the total cost of a newly built London property.
"Help to Buy ended up helping the major house builders and their shareholders more than anybody else," said Spencer. "I am not sure we should go back to it. But if we don't help first time buyers the whole market grinds to a halt."
If things don't change Spencer predicts a dull few years in the property market — interest rates are inching down but are highly unlikely to return to the rock bottom levels which buyers.
"We are not going to see double digit growth, which was a result of cheap money," he said. But the law of supply and demand suggests that prices will inch upward. "When I look at the numbers of houses compared to the numbers of people I think we will continue to see growth," he said.
"Unless we can build 1.5 million houses in the next five years, there will be upward pressure on house prices."
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