The London property round-up: cabinet reshuffle and a fees ban delay

We’re now firmly ensconced in 2018 and, just like the year before it, there has been plenty going on in the world of property in January to keep us on our toes.

With that in mind, we take a look at the main stories affecting the London housing market in the last few weeks…

Reshuffle increases emphasis on housing

Only one place to start this round-up: the recent Cabinet reshuffle carried out by Theresa May had a significant bearing on the property market, with housing given an upgrade and the appointment of yet another new Housing Minister.

In a move welcomed by those who want to see housing propelled up the domestic agenda, it was revealed that Sajid Javid’s department had been renamed as the Ministry for Housing, Communities and Local Government. This means housing will finally have a place at the cabinet table.

The fact that housing has now been added to a senior minister’s brief will also reassure those who may have questioned May’s pledge to fix the ‘broken housing market’.

“Building the homes our country needs is an absolute priority for this government,” Javid said. “The name change for the department reflects this government’s renewed focus to deliver more homes and build strong communities across England.”

This effective promotion for housing also helped to offset some of the concerns about the position of Housing Minister changing hands yet again. Dominic Raab, a key figure for Leave in the EU referendum, became the 16th different minister to take on the role since 1997, and the seventh since 2010.

Raab, the MP for Esher and Walton, replaces Reading West MP Alok Sharma, who has been moved to work as employment minister at the Department of Work and Pensions after just seven months in the role.

It is hoped, though, that the increased government focus on housing will give Raab more say than his predecessors and that he will be given more time to get things done.

Lettings fees ban won’t appear until 2019

The government ban on letting agent fees charged to tenants won’t be introduced until spring 2019 at the earliest, the National Approved Lettings Scheme (NALS) revealed in early January.

The organisation had tried to get to the bottom of when the long-awaited ban would actually be introduced, and was told by the newly renamed Ministry for Housing, Communities and Local Government that the start date would not be before the spring of 2019 – also the time when Britain is officially set to withdraw from the EU.

The government has since explained that getting the legislation through parliament will be a lengthy and difficult process.

The all-party Communities and Local Government Select Committee is currently carrying out due diligence on the draft Tenant Fees Bill – the piece of legislation which will eventually contain the ban.

Once the proposals have been thoroughly scrutinised by stakeholders and Parliament – around 15 months from now – the ban would then be introduced, the government said. But an actual, set in stone date is still not forthcoming.

Homes England launched

In a busy period for the new Ministry of Housing, Communities and Local Government, it launched a new national housing agency – Homes England – to help increase the number of affordable homes in the UK. Replacing the Homes and Communities Agency, Homes England will be the main driving force behind implementing the proposals outlined in last February’s Housing White Paper.

Using new land buying powers and existing planning expertise, the new agency will have a key role in procuring land, identifying suitable brownfield sites for redevelopment, and encouraging ‘smaller and more innovative’ housebuilders to join the market and compete with their bigger rivals.

The agency also has the target – announced by Philip Hammond before the Autumn Budget – of delivering an average of 300,000 new homes a year by the mid-2020s.

MPs warn that stamp duty cut for first-time buyers is ineffective

The influential Treasury select committee – chaired by former Education Secretary Nicky Morgan – has warned the government that it needs to take much more drastic steps to fix the UK’s housing crisis.

The stamp duty cut for the majority of first-time buyers, announced at the last Budget, was also criticised for inadvertently upping house prices by at least the amount FTBs will save by not paying stamp duty. Others have said the move will simply push up demand and house prices, which will make it even more difficult for first-time buyers to get on the property ladder.

The select committee said only 3,500 first-time buyers will benefit from Philip Hammond’s measure, while it also warned that borrowing caps on councils will need to be lifted if the plan to build 300,000 new homes a year by the mid-2020s is to be a success.

For more help and advice on buying or selling a home in London, please get in touch with Atkinson McLeod.

To find out how much your home could be worth in the current marketplace, you can request a free and instant online valuation.