EasyRoommate CEO Karim Goudiaby on why inclusion of the property market in the budget is imperative
Chancellor George Osborne will deliver his Budget of the Parliament on the 18th of March, which is less than two months before the date of the general election. We all have things we would like to see in his plans, but inclusion of the property market is imperative. Tackling our housing crisis is as much about political will and leadership as about the detail of policy. Our politicians are still somehow short of meeting that test.
There are four important points that need to be addressed.
If the housing market requires that more people depend on rental properties and landlord services, it is imperative that landlords have a basic standard of quality to uphold. In May of 2014, EasyRoommate partnered with the Mayor of London to launch the capital’s first ever rental standard, a city- wide badge of accreditation. This standard is helping to educate landlords, but it is just the starting point. For optimal compliance, this standard must be converted into a national law that extends beyond the City of London and holds landlords responsible for maintaining standards that guarantee safe housing for all renters.
Owing to the increasing cost of property in London, an entire generation has become dependent on the rental market. Even when earning a comfortable income, deposit rates as high as 20% are making it impossible for many to buy their own homes. If the UK banks are able to emulate fixed mortgage rates, like in France where 10 to 25-year fixed-rate mortgages with smaller down payments are the norm, I have no doubt millennials would be more inclined to invest in property.
For those who cannot afford housing, they should have the ability to get assistance. With tuition fees at £9000 a year on top of living expenses, it is easy to see how students struggle to make ends meet. A similar point can be made for young professional with low to moderate incomes who have to live in flatshares in a city where the average rent has increased by 6.2% in the last two years. Assistance Programs would make it possible for students to pursue their degrees without crippling debt and for young professionals to decide if flatsharing is right for them, rather than being the only option.
Since owning property may not be in the foreseeable future for young professionals, functional flatshares are incredibly important. Property developers should be building apartments made specifically for flatmates, with enough space for two, three, and more people to share. Changes should be made to the tax regime structure to encourage institutional investment in flatsharing property development and encourage additional housing supply.
The 20-something crowd is not the only population affected by the current state of the London housing market. Established and retired professionals are also feeling its effects. Making housing more affordable means building more homes of all tenures – for ownership, shared ownership, private rent and social rent. To do this we need political will, commitment and leadership. The chancellor needs to take this opportunity to address how we can help keep London an affordable place to live while maintaining the rich diversity of this city.
Karim Goudiaby is the CEO of flat-sharing website EasyRoommate