Incentive to renovate derelict properties an urgently needed reform – MFS

by: Paresh Raja, CEO of Market Financial Solutions (MFS)
  • 19/03/2019
  • 0
Incentive to renovate derelict properties an urgently needed reform – MFS
Housing policy is a topic of conversation that many people will have a strong opinion on; and those opinions will naturally vary based on an individual’s circumstances.

 

While some are keen to see the removal of inheritance tax on property assets, others are far more interested in the introduction of long-term tenancy agreements.

Differences aside, it’s important to step back and observe the picture as a whole; what are the underlying factors stifling progress in the UK property market?

Addressing housing problems has long been high on the list of government priorities, but there is certainly more work to be done to ensure more people can engage with the housing market and secure their dream home.

 

What’s hindering property sales?

The under-supply of available – and affordable – housing, would undoubtedly be the biggest obstacle standing in the way of property transactions.

While demand for property remains steady, average house prices are 2.9% higher than in January 2018 and there are simply not enough houses to meet people’s need.

Another major factor is property chains collapsing before a house sale can go through; new research shows that half of all transactions in England and Wales fell through before completion in the final quarter of 2018.

Often the blame lies with the seller – 19% of these property chain collapses came as a result of the seller receiving a higher offer after the sale was already agreed – otherwise known as gazumping.

 

So what needs to change?

Although significant strides have been made to ramp up house building efforts, less than half of house builders surveyed believe that the government will achieve its target of building 300,000 new homes a year by the mid-2020s.

Clearly, if we are to reach this ambitious target, we’re in desperate need of some creative thinking.

The thousands of homes stood empty across the UK, with many estimates putting this figure at over 200,000, should certainly be given some serious consideration.

I’d like to see more initiatives put into place to bring derelict homes back into occupancy, particularly given strong public sentiment in support of this motion.

Research conducted by Market Financial Solutions last year revealed that 44% of UK adults believe financial incentives should be on offer for those seeking to renovate derelict properties in order to rent or sell them.

 

Prevent gazumping

The same research concluded new laws should be introduced to prevent gazumping – 55% of Britons are in favour of this reform.

Losing out on a property as a result of last-minute bids by rival buyers is clearly a setback experienced by many, one that can see the unsuccessful buyer losing thousands of pounds.

Steps should be taken to rectify this impediment in property transactions.

Given the current uncertain climate, it is difficult to predict the likelihood of these proposed reforms being made – but it’s safe to say that housing must continue to be a government priority in the coming years, even as we navigate the post-Brexit landscape.

 

 

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