At a Conservative Party Conference on 10 October, 1986, Margaret Thatcher, the then Prime Minister said:
“We Conservatives believe in popular capitalism—believe in a property-owning democracy…. The great political reform of the last century was to enable more and more people to have a vote. Now the great Tory reform of this century is to enable more and more people to own property. Popular capitalism is nothing less than a crusade to enfranchise the many in the economic life of the nation. We Conservatives are returning power to the people. That is the way to one nation, one people.”
The “property owning democracy” she spoke of was one of her intended legacies to the country, but recent times have seen a slump in homeownership in the face of low mortgage lending, high unemployment and falling house construction figures.
A new report by the Government on the state of housing in England has revealed that home ownership has fallen to just 66%, its lowest level since 1988; just two years after that famous speech. The situation is set to get worse before its gets better, with the stamp duty holiday for First Time Buyers (FTBs) due to end on 24 March this year.
The intent is still there however and the report indicates that three quarters of all non-homeowners still aspire to property ownership. The sixth consecutive yearly fall in homeownership is hoped to be a temporary reflection of the state of the economy, to be reversed when it strengthens and the housing market recovers.
Nevertheless, house prices are still historically extremely high, particularly in locations like Britain’s Spa Towns (See our blog here) and, of course, many regions of the South East. Commentators say only house building is likely to stem these increases and the signs are good for the construction industry.
Bovis, a large company of house builders, for example, posted remarkably high pre-tax profits of £32.1m and revenue of £364.8m, up 22% on 2010, with legal completions at 2,045 homes, up 8% on 2010.
There are signs of recovery then, but some industry insiders believe the solution needs to be more radical. Some are suggesting that house builders should be more creative with timber, producing cheaper buildings in the timber-frame style found commonplace in much of America. Other suggestions would see VAT cut from 20% down to 5% on building maintenance and repairs. Boris Johnson wants National Insurance breaks to create jobs.
Whatever the solution, the Budget on March 21 will likely reveal the government’s plans. Mrs Thatcher may be hoping that Mr Osborne takes a strong stance over the issue and instigates and encourages the sort of fundamental change many believe necessary to reinvigorate the construction sector.
To discuss property matters with a Local Independent Chartered Surveyor in England and Wales’ spa towns, contact www.propertysurveying.co.uk.