A Sign of the Times: Populism versus Property
As a group of seasoned squatters take up residence in the £15 million Belgravia property of a shadowy Russian Oligarch, it’s hard not to note the juxtaposition of their cause with that of the self proclaimed ‘voice of property in Central London’ which rang out loudly last week. The Autonomous Nation of Anarchist Libertarians do not claim to be the voice of central London property, but they do aim to give a voice to the over 4,000 individuals forced to sleep rough in 2016 whilst vast living spaces with staggering price tags lie empty. However, the City and Westminster Property Association, whose 250 members are made up of developers, investors and landlords, do claim to be the voice of Central London property and made the feelings of London’s property power brokers abundantly clear in the aforementioned 52 point manifesto.
The CWPA’s membership ranges from huge commercial property interests such as Land Securities right through to individual residential landlords and spans the commercial, residential and retail property sectors. They lobby a multitude of different planning and development bodies, including Westminster City Council and other central London boroughs, on behalf of the full range of these interested parties. Their view, it appears, is that in order for London to remain globally competitive in the face of Brexit, investment must continue to flow into housing and infrastructure whilst the Capital must not only be recognised for its importance to the economy but must reach out to other UK cities and work with them to safeguard these real estate investments. They highlight the importance of workspaces as well as homes and protecting and nurturing a future workforce to occupy them. Recommending in no uncertain terms that the Government must refrain from any further crippling tax changes such as 2016’s Stamp Duty reform.
Despite being introduced with a wave of fanfare and the promise to slow the monopolisation of the housing market by the wealthy and private landlords, analysis late last year showed that George Osborne’s stamp duty reforms have not only slowed the housing market significantly but raised just over half of the £700 million the former Chancellor promised. Containing by far the highest concentration of the properties valued at between £1 million & £2 million, where stamp duty was raised by a whole percentage point, London has been heavily impacted by the 8% decline in transactions of these properties. In essence, the Government’s reforms have failed to appeal to either end of the spectrum we’re examining here. The CWPA are rightly aggrieved by the fact that their membership has both been targeted, in terms of private landlords and owners of multiple properties for more tax, and directly impacted in their profits, by way of declining transaction rates for their developer contingent. Whereas the Anarchist Libertarians must be frustrated that even when the Exchequer institutes reforms aimed at raising taxes from the rich, they fail to make any significant impact and inversely end up harming working people by slowing the market to such an extent that Oxford Economics estimated 14,000 jobs have been indirectly lost as a result of these changes. Not to mention the fact that a slow and unpredictable market makes house-buying harder at all ends of the spectrum.
Despite the diametrical opposition these two groups have, it is telling that both ends of the property spectrum are conspicuously flagging issues with the system. The Anarchist Libertarians are bringing more of an idealistic and extreme approach to the fore without a great deal of minutiae to analyse, but play an important role in highlighting the fact that housing is as inaccessible as it has ever been whilst there are 200,000 vacant properties in the UK. An influx of investment and forward planning, such as the one requested by the CWPA, may provide some impetus in terms of infrastructure, but could it be possible that we need a re-calibration of our property market more in line with the sensibilities of Belgravia’s newest and most controversial residents? Whilst burning the entire system to the ground might be attractive to some, it is somewhat unlikely. What can be measured is the response of Whitehall and City Hall to the whims of London property’s power players in the coming year. There have already been calls for Phillip Hammond to review the much maligned stamp duty reforms, and with Brexit negotiations on the tip of everyone’s tongues, the interests of some of the capital’s most influential forces are not likely to be ignored.
It’s threatening to be an interesting 2017.