CapitalStackers Limited is authorised and regulated by the Financial Conduct Authority (FRN 722549). Registered in England (Co. No. 7361691). Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other crowdfunding platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

Month: <span>April 2020</span>

It’s time to stop bashing landlords
Published 27th April 2020 by

It’s time to stop bashing landlords

It seems that staring at the same four walls every day has forced many of us to contemplate the nature of housing. And human nature being what it is, we’re searching for someone to beat up and blame for the ills of society.

And I’m sorry, Landlords, but right now, it’s you.

Notwithstanding the fact that 20% of the UK population rely on you for a roof over their heads [1], you’re being fingered for “pushing up the cost of housing and creating an affordability crisis for almost everyone else”. [2]

That’s quite a charge. So the rise in house prices was nothing to do with a free market economy that allowed six million more households to buy their own homes since 1980, and the two million more who were helped to do so by housing associations? And the rise in people entering private rented accommodation had nothing to do with the decline of social housing?

Presumably, those 20% would have all bought their own homes if it weren’t for you exploiting them – despite the fact that 12.5% of households still chose to rent privately way back in 1980 – before any encouragement from Mrs Thatcher and all the social changes since. [3]

We’re not saying the decline in social housing is not a problem, of course – we’re just saying it’s not a problem that can fairly be blamed on landlords.

But seriously, if it’s not The Daily Telegraph wishing your demise in an article about COVID-19 precipitating a housing crash, it’s the article’s readers chucking all their furniture on the bonfire.

On 18th April, The Telegraph cranked up the air-raid siren, saying that the 28% of landlords who owned properties outright (and therefore would not qualify from Government-backed mortgage relief) “faced bankruptcy” if tenants were unable to pay rent and that “as many as 80% (of landlords) could be forced to quit the sector”. [4]

This prediction was met with glee by a significant proportion of those commenting on the article – a typical example being, “A massive clear out of the ‘get rich quick’ Buy to Let industry will be one of the many welcome and long overdue effects of the COVID crisis”.

Jeepers! Whose side are they on? Certainly not the side of those families who will have nowhere to live if landlords pull out (which they won’t of course – what kind of investor sells an asset in a sliding market?).

Neither is the Shadow Cabinet too bothered about those families, with Labour demanding a tightening of the coils around landlords in their manifesto [5] and Emily Thornberry screeching that empty houses should be confiscated from their owners [6].

Local activist communities like the London Renters Union and Acorn stirred the pot further by concocting a Renter Manifesto which demanded “Homes to live in, not for profit”, insisting that landlords should sell their properties to local authorities (as opposed to on the open market) and again pinning the blame squarely and unfairly on those who rent out properties rather than the Government which doesn’t build and society as a whole which feels an Englishman’s home is his asset.

The Guardian and The Independent, of course, have been banging this drum for quite a while. Last April, Mike Segalov responded to Government changes to BTL legislation by calling landlords “exploitative and inhumane charlatans” and pointing out that “someone earning minimum wage would find the average private rented home unaffordable [7]. Landlords can point to “the market” to justify charging high rents and feel they aren’t to blame”. Well, thanks for that, Mike – would you mind explaining to us how landlords specifically are to blame, if ordinary homeowners aren’t? Or don’t you want to go there (you didn’t, so I suppose that answers that question).

And back in July, one could imagine George Monbiot wringing  his tear-sodden hands as he typed a piece about tenants “paying landlords to live like kings”, mewling that “the UK has become a paradise for landlords” [8]. He rages that “in the 13 years between 2002 and 2015, average wages for people who rent rose by 2%, but their rents rose by 16%” without a sniff of context. The context, of course, is that housebuilding in this country has always lagged behind population growth, and the period he highlights saw a massive increase of 9.7% coupled with a rising trend of single occupancy due to social changes. This massive increase in demand pushed house prices up 95% over the period that George bewails rents going up 16%. [9]

Why he feels renters should be immune from the market forces that toss the rest of us around, he doesn’t say. In any case, renters in the UK have it better in the UK than they do across Europe and beyond. We have more tenants with subsidised rents per head than in any other country bar Slovenia. [10]

Also worthy of note is the fact that people living in Denmark, Germany, Austria and Switzerland rent, rather than buy, and presumably by choice, judging by the above chart.

Quite why the heavyweights of “social justice” are queueing up to give Mrs Miggins a kicking it’s equally hard to fathom. Of course, painting landlords as the Robber Barons de nos jours is a populist way of stirring up class hatreds and hastening their comrades to the barricades.

However, it’s simply a spiteful campaign of emotional propaganda, by grown-ups who should know better. It wants us to believe that all renters are poor and all landlords are rich. And when we see the reality it starts to look a bit silly.

There are many reasons why people rent – high-level job relocations, postings, marriage breakups, not just through lack of choice – and let’s not forget that most private landlords are just ordinary folks who got stuck with their mum’s old end terrace, or moved in with a second spouse and kept the old place on “just in case”.

Even those who kept buying and built up a string of rental homes to keep them in their retirement are hardly grinding the faces of the poor into the dirt, for the most part. Yes, they’re using property to make profit – but profit is simply another word for “income”, and why is that somehow worse than using any other means to make an income? Why is it different to making money from selling cars, or apples, or the sweat of your brow? Why, for that matter, does someone investing to ensure their own self-sufficiency in retirement make them a legitimate piñata for the illiberal elite?

And why vilify people who are providing a much-needed service? Why try to hound them out of the business, when we know that if they weren’t doing it, the UK’s homelessness problem would become considerably worse, not better?

The simplistic argument of Monbiot, Acorn et al is that fewer buyers means lower prices, so if you took private landlords out of the equation, all homes would become more affordable. But this is naïve reading of economics. It completely ignores the fundamentals of the cost of housing.

Private housing is built to sell to people. The people who build it do so to earn their crust. So unless it’s heavily subsidised, private housing will only ever be built when it’s economically viable. And since the cost of materials and labour isn’t going down, the only moving part in this equation is the cost of land. And in tough times, that goes down. Not so long ago in some parts of the country, sites couldn’t be given away because the cost of building houses was more than they could be sold for. So nothing got built and who suffered most? The people at the bottom of the housing chain, that’s who.

Of course, the social justice nihilists don’t tell us this; either because it’s inconvenient to their argument, or because they don’t understand it.

Do these people hate the idea of landlords so much that they would rather make the poor homeless than see a few people make an income from homing them? Because, if those landlords were really serious about making money from property, they could do a damn sight better than Buy to Let, anyway.

As we pointed out years ago, [11] Buy to Let is a seriously tough way to turn a penny.

Investing your redundancy or pension drawdown (say £100K) into perhaps a modest flat costing £275K – with maybe a 3% mortgage, might yield you a 3.5% return once you take into account void costs, management fees and maintenance.

And, of course, that’s after shelling out £15,700 up front for stamp duty, legal fees and mortgage costs. Not to mention all the stress, costs and headaches of managing an asset with real, living people occupying it (and sometimes not). And if you got fed up of the wildly erratic income and tried to sell within 6 years, unless there’d been a hike in property values, you’d lose money on it.

That’s a heck of a lot of pain for a slippery 3.5%.

Particularly when you consider that you could invest that same £100,000 and make annualised returns of 10%+ out of property development in just a year or two (with some projects having paid as much as 20%). The bottom end of that range is significantly more than our landlord would make even if he held on for 20 years and enjoyed 3% compound annual growth in house prices.

Investors in CapitalStackers have been making these kinds of returns with none of the pain landlords go through – and with a lot less capital exposure, because the borrower is taking the first loss risk if the market falls. Rather than having to service a huge BTL mortgage, investors can participate in property developments with as little as £5,000.

In reality, these are the people making smart money out of property – not your poor old Buy-to-Let landlord. So please, let’s cut landlords some slack.

They don’t have it as easy as you think.

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CapitalStackers Limited is authorised and regulated by the Financial Conduct Authority (FRN 722549). Registered in England (Co. No. 7361691). Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other crowdfunding platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

Our business model always planned for the worst. Well – so far, so good…
Published 22nd April 2020 by

Our business model always planned for the worst. Well – so far, so good…

Of course nobody saw this COVID-19 situation coming. We certainly didn’t, and it would be pretty despicable to claim we did. However, that’s not what this is about.

What it’s about is the fact that, as a platform, we’ve always taken our duty to our investors seriously. Not just to roll up the cash for them in the good times, but to keep doing so in the bad times. Even when the less circumspect were pulling out.

To do that, you don’t need a crystal ball. Nor do you need a clear vision of what might happen. But what you do need is a clear vision of what you’d do in case anything bad happens.

That’s why the directors of CapitalStackers – seasoned property lenders through more upticks and downturns than any journalist would care to remember – used their hard-fought experience to build as much certainty as possible into their business model from the outset.

Specifically, they always ensured that every penny of the capital required to finish any of our borrowers’ developments was screwed down before the first trowel was lifted.

In other words – our investors are never asked to part with a single penny until the entire project is fully funded – end to end.

Along with the developer, we’ll fund the site acquisition (and sometimes some early stage building work).

From that point on, all the money required to pay the contractor – through to the laying of the last roofing slate and final lick of paint – is in place before the first bag of nails is ordered. These funds usually come from a bank (which we often help organise through our own contacts).

In brutal terms – this means that the development is never dependent on us hunting around for new investors to meet future construction costs. Even when the world is facing unheard of uncertainties, the contractors on all our sites are still certain they’re going to get paid, whether they’re just knocking in the last nails or just turning the first sod.

All of the sites we’re funding are still working (albeit slightly hamstrung by their supply chain). Of course, some of them may be forced to down tools for a while, but we’ve already gone in and remodelled the deals to take this eventuality into account.

Some of our sites are nearing completion – and here again, we’ve already planned for the potential of sales being delayed before we even heard of COVID-19. Experience told us to plan for the worst happening, and so if it doesn’t everyone still wins.

As it happens, this actually isn’t turning out as badly as one might expect. Of our new developments up for sale, the proportion of buyers who’ve pulled out is extremely low (we’ve had just one – and this is a buyer who is unable to progress the sale of their current home due to the lockdown). Most buyers are still buying, and at the price agreed beforehand – so there’s actually been no drop in value.

This is the story across every site we’re dealing with, and purchasers are ready to go when the lockdown lifts.

Unfortunately, even though we’ve warned repeatedly about it, the necessity of fully funding projects from the outset is still pretty much ignored across the rest of the industry.

Many projects funded by other lenders (some of them well-known names) will be finding themselves in difficulties because those responsible simply trusted in the Finance Fairy – believing, as many do, that new investors could always be found to keep topping up their buckets.

However, while many senior lenders are now substantially lowering the LTV ratios at which they’re prepared to lend to the point they might as well not be there at all, the banks we deal with remain active and still have an appetite for new deals.

And we’re the same.

Ironically, and despite us tightening our criteria in response to the climate, the situation is actually increasing our own pipeline – because it’s where the strength of our model shines through. It might make it a little slower to get our deals up and running in the first place, but it’s actually what keeps us strong at times when other lenders are forced to fall away.

Deals are now being brought to us that have fallen out of bed elsewhere – due to senior or junior lenders pulling out. And it’s not because of the risk – it’s because the platforms are struggling to fund their own loan book.  Their blind faith that the money tap would keep dripping has left them high and dry.

So although only a lunatic would say they were happy with the state of the world right now, at least we can say we’re fairly happy with what we’ve done to prepare our investors for it.

Of course, we sincerely wish our brothers in the P2P market well, and hope they do come through it unscathed. At the very least, if they do have funding shortfalls, we hope the Government can step in to plug any gaps, given that it will be secured on the properties being built, and redeemed on the sale of them.

And far from revel in our current USP, we nurse a fervent hope that, having come through this and out the other side, our P2P brethren will adopt the practice of ensuring that all building finances are locked down from the outset.

The construction industry and the housing market are too important to the UK economy for them not to learn this lesson.

It’s incumbent on all of us to keep it going.

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CapitalStackers Limited is authorised and regulated by the Financial Conduct Authority (FRN 722549). Registered in England (Co. No. 7361691). Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other crowdfunding platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

Why is the “Pink ‘Un” so blue about the housing market?
Published 12th April 2020 by

Why is the “Pink ‘Un” so blue about the housing market?

The FT is happily settling into its role as our nation’s most eager Prophet of Doom, rolling over and admitting defeat on behalf of us all before the first real punch has been thrown.

In this article on 8th April, James Pickford quotes property lender Octane Capital’s Chief Exec, Jonathan Samuels, who wails “To even be talking about bricks and mortar in the current climate feels absurd”.

Richard Donnell, research director at property website Zoopla, also runs in to aim his Nike Air Max at the market’s head, predicting a far steeper decline than 2008, and a very slow return to normality due to the length of the homebuying process and a survey of the Royal Institute of Chartered Surveyors showed 82% are expecting house prices to fall.

The article ends with the prognosis that, even if the crisis is over by the summer, it could take till the New Year for the majority of buyers to get their confidence back.

Which is quite a bold prediction. After such a dramatic experience, who can predict how people will feel? It’s just as likely that after months of staring at the same four walls, people will be desperate to move and we could see a berserkers’ property boom for the rest of 2020. After all, look at the effect of the Christmas break on marriages.

Certainly, other property experts aren’t as keen to ring the bell on the market as the FT.

The real estate giants, JLL advise against betting on any definite outcomes, denigrating the “infodemic”, which it defines as “an overabundance of information – some accurate and some not – that makes it hard for people to find trustworthy sources and reliable guidance when they need it,” and counselling that, “in such a fluid situation, the facts and consequences are changing quickly”.

However, they suggest that the current “consensus forecast is for a sharp shock to the global economy in the first half of 2020 (including a 5-10% drop in values) followed by a bounce back – reminiscent of the recovery after the SARS outbreak in 2003”.

The JLL advice to the industry is to step up our preparedness for a number of scenarios, model business continuity plans, protect and diversify supply chains, “increase hygiene and cleaning measures on site …and also bring in more outdoor air in buildings…to help dilute airborne contaminants’.

But usefully, it analyses the impact by sector – recognising that painting everything black with a broad brush is not helping any of us. The travel and hospitality industry, for instance, will see areas that depend on international tourism (e.g. Edinburgh. York) and those seen as epicentres of the outbreak (London) hit in the short term and possibly suffering long term effects. However, it suggests an increase in domestic visitors and staycations will cause a rapid bounce back in the rest of the sector.

In retail, cashflow and changing consumer behaviour will lead to a slowdown in store openings, but the need to rethink and localise supply chains could lead to more demand for logistics and storage space across the UK.

The same may be true in the industrial and white collar sectors, with buildings becoming taller but smaller in footprint, and with less demand for parking land. However, they don’t see the fast tracked adoption of homeworking affecting demand for office space in the long term.

In the residential sector, it sees no threat to multifamily developments as an asset class, a drop in demand for student accommodation due to the decline in foreign students (particularly from Asia), a reduction in private investor appetite for flexible, short term co-living accommodation and a tougher investment market in the senior/healthcare sector due to increased protection protocols.

The prophets at Knight Frank have little time for Doomsters and Gloomsters, predicting that property prices fall by no more than 3% across the country and 2% in London. They’re also dauntlessly forecasting no price drop at all for prime central London properties and a strong revival in the New Year, based on the judgement that lockdown restrictions will be eased from July onwards. Their Global Head of Research, Liam Bailey, said “The housing market was in a strong position in January and February. A sharp uptick in sales and price growth was seen across the UK, with even the prime central London market seeing a reversal of a five-year long price decline.”

However, Mr Bailey voiced concern that even his predicted 18% rise in buying activity next year may not be enough to make up for the enforced pause in house sales this year and called on the Government to stimulate the market with a cut in stamp duty.

Over at Savills, they share JLL’s chariness about predicting the length, depth and shape of the downturn, and suggest the current rate of shutdown amounts to 79% of this year’s housing delivery. However, they’re confident that once the lockdown ends, if pent up demand doesn’t drive a fast bounce back, then “the Government’s focus will turn to measures that support the speed of recovery in all affected parts of the economy, including housebuilding”.

Lucian Cook, Head of Residential Research at Savills, says: “Assuming long-term damage to the economy is contained, we expect the five-year outlook for prices to remain similar to our November 2019 forecasts but with a different distribution of growth year to year”.

Which, in our view, is all the more reason to keep construction going – as long as the materials pipeline can be maintained. Savills points out a very real prospect of planning permissions and Help-To-Buy schemes expiring and, if they can’t be kept busy, workers (both skilled and unskilled) leaving the industry forever.

On the plus side, they predict rich pickings for cash-rich developers thanks to less fighting over sites, which may help offset the reduced valuations. Like JLL, Savills predicts “falls of 5 to 10%, returning to stronger growth in the medium term”.

But most importantly, they outline the importance of maintaining the flow of consents coming through the planning system, suggesting that if this is focused on, then local authorities could actually exit this period of shutdown with improved five year housing land supply (5YHLS) positions”.

If, on the other hand, sites are closed for a number of months, many local authorities could fail the Housing Delivery Test (which requires them to deliver 75% of housing targets).

Closer to home, Ed Hartshorne of the York estate agency, Blenkin & Co. was even more chipper, saying: “The number of sales will inevitably plummet over the next few months but suppressed demand may keep a hold on values.

“I think the housing market will respond energetically to the economic bounce when it does come, leaping into action and spurred on by an eager and cooperative market of buyers and sellers. We have already signed up clients eager to launch 20-odd houses just as soon as normality returns”.

Yorkshire based property consultant Alex Goldstein assures us that “demand and new supply will be strong post lockdown. We now have the lowest base interest rate in our history. This will filter through to the lenders, which will make money even cheaper to borrow. Prices will hold steady for now and we will see a gradual increase over the next few years as demand continues to outperform supply”.

He further predicts that the change in working practices, brought on by coronavirus, will lead to more people moving to Yorkshire. “Employers have now experienced how staff can work from home and I think that employees will push for this lifestyle choice. As we are already seeing, this will lead to more people leaving London and the Home Counties for God’s Own County”.

However, once Yorkshire is full, we confidently predict a trickle down effect to lesser counties.

So all in all, the outlook seems to be a little more rosy than the FT wants us to believe. As bad as it gets, the COVID-19 crisis is unlikely to make a significant dent in the demand for housing, and the construction pause won’t have helped the supply position. And since even longer term low interest rates can only add more fuel to the fire, all we can say to the nation’s developers is, “Keep building, Guys! Britain needs you!”

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CapitalStackers Limited is authorised and regulated by the Financial Conduct Authority (FRN 722549). Registered in England (Co. No. 7361691). Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other crowdfunding platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.

5 things the Government must do now to resuscitate the housing market
Published 6th April 2020 by

5 things the Government must do now to resuscitate the housing market

Who knows what kind of economic landscape we will witness when we finally emerge, blinking in the sunlight, from our Covid-19 lockdown?

Many things will have changed, for certain. Many jobs – many companies even – will have ceased to exist. But one thing that won’t have changed, as sure as death and taxes, is there will still be a housing shortage.

The social change that drives that shortage won’t have gone away, either. Family break-ups, people getting married later and living longer are constantly repainting the panorama. In the new zeitgeist, we need more housing units because we have more family units.

And the impediments to solving that problem haven’t gone away either. They boil down to two simple facts: (1) We’re not building enough; and, (2) We’re not moving enough.

Society is a heaving, growing, moving mass, and if people get stuck in the wrong home (or without a home), our social fabric is tied in knots.

What’s more, if we underestimated the possible effects of a pandemic, it will be as nothing compared to the effects of a housing shortage left unaddressed in the years to come.

So having put the housing market into an induced coma, what can the Government now do – indeed, what must it do – to lubricate this rusty housing chain, get more people into the right homes, and keep the housing market moving?

  1. Facilitate mortgage availability

One of the most short-sighted responses to the current crisis is mortgage lenders refusing new loans to anyone unless they already have 25-40% equity. One of the UK’s biggest lenders, Nationwide, announced on 24th March that it would only offer mortgage deals at 75% Loan-to-Value – effectively pulling out of the new mortgage market. Santander and Skipton trumped them by setting its limit at 60%. One by one, most of the other major lenders followed suit.

While this is widely reported to be a temporary measure, none of the providers seems to have noticed that they have collectively emptied both barrels into their own metatarsals.

If mortgages dry up, so does the chain of buyers. No buyers means housing values will fall, and the mortgage lenders’ portfolios will suffer a pointless hike in LTV ratios.

It’s also totally unnecessary and short-termist. They’re seeing risk in absolute terms, rather than human terms. Yes, it might make sense on paper not to lend at 95% LTV when you might anticipate a 10% drop in the market. But houses aren’t airline shares. People don’t, by and large, buy them to sell in the short term. They buy them to live in. The average tenure has rocketed from 8 to 21 years (35 in London) so nitpicking risk assessors are not only missing the point of mortgages, they’re also shutting off their own pipeline and – even worse – blocking the lower paid from getting onto the housing ladder.

So if the mortgage providers won’t help themselves (and history has shown that they largely won’t), the Government needs to extend its provisory largesse to this area of the economy and erect a nerve-settling safety net. The message they’re giving to banks about businesses – “Just let them borrow” – needs to pervade the entire economy, because if people didn’t realise before how utterly interlinked the economy is, they do now.

  1. Suspend Council Tax on empty buildings.

What better way to bring down an already staggering construction industry than to administer a baseball bat to the knees, in the form of taxing their product before they can even sell it?

What other industry has to overcome such a hurdle? Builders are actually being forced to pay for services that are not being used – bins not being emptied, public transport not being utilised, parks and recreations not being visited – because there is as yet no-one to use them. This is akin to charging road tax on cars that are still in the showroom, or inheritance tax for your granny who isn’t yet dead. It’s obscene, pointless and again, it crushes its own windpipe. Councils should be encouraging new homes to be built within their provinces, to increase their own long-term revenue.

Yes, we know that the original intention was to encourage the occupation of empty homes, but right now, we need more empty buildings in order to fill them, and this policy is not helping in the least.

It would be a strengthening shot in the arm if councils were to suspend this utterly unconstructive tax on new build homes – preferably forever, or at least until the industry is in better shape.

  1. Extend the current Help to Buy Scheme

This is one of the most liberating initiatives ever to have hit the market, so why limit a force for good? The news that the Government has confirmed the extension of the Help to Buy equity loan scheme till 2023 is to be welcomed – but why this should be restricted to first time buyers is a mystery.

Wider stimulation will warm the blood vessels right through the industry – helping existing homeowners to move will naturally free up homes for first time buyers. And since the current extension was put in place when Corona was nothing more than a beer, we now need to consider how long the existing scheme should be extended to help repair the damage of the virus.

  1. Suspend Stamp Duty

Boris Johnson has already hinted at scrapping it, and having hinted, he needs to get on and do it, because the rumours themselves will stall the market – after all, who wants to buy now if they can save a considerable wedge by waiting till spring?

We already know the stimulating effect of even small tax changes on the market, but they just need to be done in the right way – the wrong way being the way Nigel Lawson did it in 1988. The housing boom (and consequent bust) of the late ‘80s was an unintended result of Lawson’s bungled removal of double mortgage relief for married couples. By telegraphing in March his intention to scrap it in July, he inadvertently caused a three-month stampede, which overheated the market and helped induce its collapse.

Nevertheless, just because one chancellor applied the wrong medicine at the wrong time, that doesn’t disprove the benefit of a little tonic in a place that sorely needs it. Stamp duty has left the handbrake on the housing market, and the further we try to drive, the more it squeals.

Lifting it, even for a little while, would bring blessed relief. Millions of older people are trapped in houses that are too big for them (and would be ideal for younger families). Many of them could afford to move when they find the perfect little bungalow, but if they need to bridge the sale of their house while they wait for a buyer, they’re subject to a 3% SDLT premium. Granted, they can claim it back if they sell within three years, but it’s a big chunk of cash to be waiting for, and so it’s a deterrent to the Silver Sellers. Not to mention a huge admin cost to the Government for money which, ultimately, they have to hand back.

Remove it, and the entire chain moves on a notch.

  1. Let builders build and equip them to do it

The clamour to close building sites must end with a firm word from the top. Builders need to keep building, full stop. The alternative is to extend the housing crisis until it becomes a catastrophe.

Granted, conditions on some building sites must be addressed – particularly in London, with crews working in cramped conditions, and in some cases living at close quarters, too. But to shut down an entire industry because of poor observance in one city would be madness.

Writing national policy with London blinkers on is never a great idea. The majority of sites outside the capital are run within Government safety guidelines, and are regularly inspected to ensure they continue to do so. The nation needs them to keep building, so the Government needs to let them get on with it.

And this also means “stop giving mixed messages”. Set the guidelines and make them clear and comprehensive.

Those building sites which have stayed open are finding most builders merchants that supply them are closed. True, the Government told builders merchants to get back to work last week (while observing public health guidelines), but that was amid a cacophony of messages telling everyone to stay home unless their job was absolutely necessary. Such discordant advice naturally led the bigger chains – the Selcos, TPs, Howdens et al – to close their doors rather than risk an HR backlash.

Even in those outlets that are open, confusion reigns. Anecdotal reports paint a patchy picture of how the directives are being interpreted, with builders being sold plasterboard, but not skirting board, as it is “not an essential item”.

If we trust builders to build, we must also trust them to judge what they need to do their job, and not tie their hands unnecessarily.

Let’s not forget, also, the interconnectedness and interdependence of the economy. A moving housing market drags the replacement kitchen and bathroom market along with it. It mobilises an army of manufacturers and suppliers, fitters and finishers, painters and decorators, landscape gardeners, soft and hard furnishers…

Keeping these industries moving preserves them and ensures the housing market is ready to go as soon as restrictions are lifted – and in an industry that moves slowly, this is surely vital. The rest of the economy can’t afford for the building industry to slow to a stop. Too much else depends on it.

So will any of this happen? We hope so. This Government has distinguished itself so far by a remarkable willingness to listen. Solutions have been proffered and adopted almost as soon as the problems have been identified. And we imagine they will continue to do so. The first four measures above would have been a welcome response to the housing crisis even in normal times. But now we’ve had a crisis upon a crisis, they have become imperatives.

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CapitalStackers Limited is authorised and regulated by the Financial Conduct Authority (FRN 722549). Registered in England (Co. No. 7361691). Investment through CapitalStackers involves lending to property developers and investors. Your capital is at risk. Investments through this and other crowdfunding platforms are not covered by the Financial Services Compensation Scheme. Unless otherwise stated, returns quoted are annualised and gross of tax.