News Review: Property


Shelter is essential for survival by


Christopher Taylor,


by


CEO London & European


John Smith xxxxxxxxx xxxxxxx


if variety is the spice of life, then things are certainly piquant for anyone involved with the property business these days. a global financial crisis and an untried political collaboration throw more than enough into the mix for those who like it hot, that’s for sure. the new regime started


by gaining a big cheer from many, including me, who were pleased to see the back of HiPS. But other policy decisions are going to be less black and white i suspect and as i write, there is a lot of speculation flying around about what measures are going to be introduced in the emergency budget. the initials cgt are becoming as familiar as some of our language’s most well- used acronyms these days. i do sometimes wonder if the tail wags the dog in these situations. media hype can be a powerful thing. Look at moira and the Bombay potatoes. When chris evans got moira Stewart to make Bombay potatoes on his radio 2 breakfast show, all of a sudden there was a nationwide shortage of cayenne pepper. it’s happened before. take delia and the goose fat. or perhaps don’t! the media can be extremely influential. even if we think we are being considered and professional about our investment (or culinary) decisions, the constant media


focus on certain issues above others can’t help but shape our thinking. When it comes to hard


cash, increasing Vat is more fruitful for the government than changing the cgt bands. it’s been suggested that a rise to 20% would raise over twelve billion. But it’s been something of an elephant in the room for the administration and had a slightly lower press profile; so consequently, the idea hasn’t been exorcising us quite like the capital gains tax. if a buy to let investor takes a long term view, then it is better to sit tight, continue deriving an income from rent and consider the tax implications at a later date. after all, you’ve only got to pay cgt if you realize the gain, and it could be changed again in five years time! regardless of the whys and


wherefores, we do now have a whopping deficit and we sure as heck have to do something to deal with it if we’re going to stay on the right side of the credit ratings agencies. Fitch has commented again about the deficit recently, asking for a more ambitious debt reduction plan.


it


strikes me just how much potential power these agencies still have, despite much of the finger pointing in their general direction for failing to accurately assess the creditworthiness of the mortgage backed security portfolios that contributed to the downfall of the banks and, as a result, the global economy. their opinions can have such as big sway on markets and whole economies and i’m interested to see how


eu proposals to tighten their regulation work. So, the country has been


told to prepare for wholescale change. a call has gone out from number 11 for the public to suggest where they’d like the chancellor to make cuts. talk about asking turkeys to vote for christmas. We’ve been told by the Prime minister to be ‘braced for inevitably painful times’ and warned that we’re facing the biggest cuts in public spending since the second world war, so the message is fairly unequivocal. But i suppose the logic is, if we’ve had a quasi-consultation process about where to slash spending, then we can’t blame the government when we don’t like the result. the reality is that there are


so many different areas of life which require funding, it’s practically impossible to work out where the priorities lie and they’re inevitably going to vary hugely according to circumstances, both on a macro level and when it comes down to our own household budgets. industry


commentators


have bemoaned the fact that housing doesn’t feature more prominently in the new coalition’s agenda, citing the exclusion of grant Shapps from cabinet meetings as evidence of its low status, but i take a slightly different stance. undoubtedly we have


many challenges to overcome in how we manage the volatility and uncertainty in the housing market over the coming months and years, and government policy will play an important role in that. But


arguably the less intervention, the better! When it comes down to it, in our business, we’ve got one thing in our favour, which carries more weight than anything else and that is the essential, almost primordial need for housing amongst ordinary people. Shelter is second only to food and water when it comes to essentials for survival. But it’s even more than that, in this country, we have a particular need for home ownership. the desire to buy bricks and mortar is an entrenched part of the national psyche, that isn’t going to go away just because it gets harder to achieve. So given that, i think that


we should sometimes take stock and try and look on the bright side. We’re lucky that we don’t work in the fishing industry in the gulf of mexico, or in the restaurant business with m&S dine in for £10 offers taking all the trade. When money’s tight, it’s surprising how we can get used to doing without things we thought we needed. People could get used to going camping in the new Forest instead of climbing in nepal, they can get used to going on the bus instead of the Bentley… (implausible, but possible!). But my point is that certain things we can do without. Some things we think are essential aren’t, so once you get used to not having them, then you might not even bother to go back. our stock in trade, a home,


is not one of those things. there will always be a need and a desire for housing; it’s an integral part of life.


mortgage introducer JULY 2010 15


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52