We humans have three basic physiological needs: food, water and shelter. In 21st century Britain, it appears as if none of those base requirements can be taken completely for granted, which is quite the state of affairs.
Reservoirs are running dry, children are going hungry thanks to “Dickensian” levels of poverty, and 350,000 people are homeless – living rough, or in hostels or in temporary accommodation.
It might be that hostels and B&Bs fulfil the need for shelter at the most fundamental level. But in an advanced, relatively wealthy country like the UK, the failure to ensure decent housing for all ought to be a matter of national shame.
The under-supply in housing stock has been well-documented over many years. The present government has promised to get a grip of the situation by easing planning rules and facing down the Nimbys. Considering Labour’s U-turn record over the last year, there might be some scepticism as to whether they can see it through.
But let’s put to one side the issue of building more homes for an expanding population. The other fundamental problem with our approach to housing is that it is no longer about fulfilling that basic need for proper, secure shelter. Instead, property is seen as a commodity; a means to make money, whether through long-term growth in prices or by turning a quick buck.
I imagine most homeowners occasionally feel smug about how the value of their house has increased. I might recognise my good fortune at having been able to get on the property ladder 20 years ago – but that awareness doesn’t stop me from popping onto Zoopla to check out what my house might be worth now, compared to what we paid for it. I am not in it for profit, but there is still a bit of me that thinks of my property not just as a home but as a financial asset.
For plenty of people, property is a financial asset above all else. There are the second-home owners, who sleep comfortably in the knowledge that their holiday cottage by the coast will bring them a return in the long run or can be rented out to tourists for an easy income. There are the professional landlords – some providing a much-needed service at sensible rents; others letting sub-standard flats at inflated prices to the desperate.
And then there are the flippers: those people who snap up what seems to be an under-valued house, paper over the cracks and then flog it on at the highest margin possible.
I am exaggerating a tad, of course. No doubt, there are plenty of individuals who turn wrecks into dream homes and are happy to make modest profits before moving on to the next one. Then again, the internet is flooded with videos advising prospective flippers on how to achieve the highest returns with the least effort. TV shows such as Homes Under the Hammer have shed light on how house-flipping has become a big business.
You might say this is just a free-market economy at work. You could argue that house-flipping improves tired housing stock. But as with second homes, the danger with flipping is that it distorts the market by placing the profit or investment motive at its heart.
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In this context, it is welcome news that the proportion of houses bought and then re-sold within 12 months is falling. In the first quarter of this year, only 2.3 per cent of sold properties had been flipped, the lowest figure since 2013, and seemingly a response to the increased stamp duty payable on second homes. In short, it is harder to turn that quick buck, and so those who are in the market for profit, rather than the mere trifle of secure shelter for themselves and their loved ones, are moving their money elsewhere.
In an unrelated development, Britain’s biggest homebuilders this week agreed to pay £100m towards affordable homes to avoid a decision by the Competition and Markets Authority on whether they broke competition law by swapping sensitive information between them – a claim the homebuilding companies deny. It is more good news for those who would like to see a rebalancing of the market.
Given my earlier admission about checking out my home’s value on Zoopla, you might wonder whether I am really in any position to pontificate. Let he who is without sin cast the first stone and all that.
But I will accept my place in property purgatory: better that than the entire market being dragged into house-flipping hell.
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