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Patrick's Property Politics

Tories Trash 2023

Wednesday 13th December 2023

By Patrick Bullick

These Tories are Terrible for People & Property

Housing generally has long suffered from the neglect and incompetence of politicians. This year Michael Gove has brought his famous vim & vigour to the department, demanding sweeping changes.

We can now see the malign effect of a civil service left to its own devices for too long. They have brought out of the cupboard a couple of ill-conceived and appallingly drafted pieces of legislation, driven by their left-wing Oxford University ideology.

The Renters Revenge Bill has not yet hit the statute books but is already causing landlords to exit the market in droves. Tenants are suffering much higher rents as a direct consequence. Not the aim of the unworldly PPE graduates.

The Leasehold & Freehold Bill has some good ideas within it, lessening costs and giving greater powers to leaseholders. However, there is the small matter of Capital Value being ripped from Freeholders by the dissolution of ground rents and the removal of ‘marriage value’ from lease extension valuations. Expect to see big cases tied up in the Courts for years.

The Treasury is  to blame for many of the ills in the property market. Jeremy Hunt has done precisely nothing to deal with the taxes which hinder Central London property market fluidity.

Stamp Duty is still prohibitively high and CGT on property is still 28% - as opposed to 20% on other asset classes. Jeremy could increase the tax take from high value property transactions, simply by reducing Stamp Duty and CGT to normal levels and increasing transaction volumes. But no!

Preventing private landlords from off-setting their mortgage interest against income before tax, makes being a long-let landlord unprofitable. This drives them either to holiday letting, where they can offset interest, or to selling, thereby reducing supply to tenants even further. There is a simple solution. Re-instate interest offsetability.

Inward investment into the UK is stopped at the pass by Jeremy and Rishi’s decision to raise corporation tax to 25% - double that of Ireland’s 12.5% rate. I know where I would rather invest now.

Making political predictions can be a mug’s game. However, it seems inconceivable that the Conservatives will still be in power by the end of 2024.

But will the alternative be better?!

Until next time….

PB 

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