As an election looms, Andrew Turnbull, managing director of Wellesley Finance, calls on the next UK government to prioritise affordable housebuilding…
THERE’S AN ELECTION coming up. And that means potential changes to the housing market. As the UK prepares to go to the polls on Thursday 12 December, the property experts at Wellesley have just one demand of the next government: support policies to encourage the building of lower value houses.
“We still have a fairly serious structural shortage of housing in the lower end of the housing market,” says Andrew Turnbull, managing director of Wellesley Finance. “We’ve seen over previous years a number of initiatives put forward to try and address those problems, and we do see some improvements. However, we are still not building enough houses.
“What we want to see is a real focus on making sure that there’s commitment to trying to make sure that first-time buyers and people buying their second home – and their next family home – are supported.”
Wellesley has been particularly focused on the affordable end of the housing market. In recent years, the property-backed lender has extended its reach across all areas of England and Wales, investing in affordable properties in the most accessible areas of Manchester, Birmingham, Leeds and Nottingham, as well as commuter belt hubs such as Harlow and Bishop’s Stortford.
“The common denominator is always that the houses are sensibly priced and can be afforded by the average person,” says Turnbull.
By focusing on this end of the housing market, Wellesley has had a front row seat to the effects of public policy over the past few years. Turnbull has seen how stamp duty has led to a slowing of house sales on the higher end of the market, while Brexit-based uncertainty has resulted in fewer families downsizing, which has led to a shortage of mid-market properties. By contrast, affordable housing has flourished, thanks to the Helpto-Buy scheme and a stamp duty waiver on cheaper properties.
“Fundamentally the reason why we decided to focus on affordable property three and a half years ago was because we wanted to align ourselves with public policy,” explains Turnbull. “We knew that’s where the long-term backing of that market would be and that proved to be a really good move from our perspective.”
Wellesley’s nimble business model means that the platform is in a good position to switch its focus again, should public policy change after the election. So what can the next government do to stimulate the housing market in the years ahead?
According to Turnbull, it will require an easing of planning permissions, a reduction in stamp duty and better access to development finance. “If we look at the Conservatives it’s likely they will want to continue the work they’ve been doing in recent years with things like Helpto-Buy, and the support they’ve provided to lenders,” says Turnbull.
“With regards to Labour, it’s likely they will promote a greater amount of affordable housing, i.e. social housing. And so I think we’d see significant action there. “I think it’s very unlikely that either party will do nothing on this front. This is a really important long-term issue that the UK is facing and so the idea of doing nothing to create more sensibly priced housing seems very unlikely.
“The one thing I would ask any incoming party to consider is that if they do wish to make some radical change, they do not leak it, they do not give a long notice period – they just do it. Periods of indecision are generally not good and that’s been an understatement when it comes to Brexit.”
Whatever happens after 12 December, Wellesley will be ready for it.