While Property rights can often be deemed to be a dry subject, all brokers, investors, lenders and even cutting-edge underwriting technology like Dashflow rely upon a healthy market – one that is supported by a rational, consistent and solid framework around the place of Property. Without it, a thriving and historic market will be at risk.
The United Kingdom, revered globally for its robust rule of law, appears to be teetering on the brink of a policy-making quagmire when it comes to the institution of Property. Recent actions by the government, political activists, parts of the media, and even esteemed institutions like Cambridge University, are contributing to a worrying decline in policy sophistication.
The current decline is reminiscent of scenarios more suited to fictional narratives of Latin American magical realism than the sober realities of British statecraft.
Consider this: if the government proposed that Chile hand over Easter Island to French Polynesia overnight through an arbitrary press release, the world would balk at the absurdity. Yet, in the UK, we are witnessing proposals that similarly undermine the integrity of the framework concerning Property, striking at the heart of what has historically been a sacred sovereign matter.
Chile, with its rich naval history and decentralised state structure (their Senate was built outside of the capital Santiago in the 1990s), shows immense respect for its territorial integrity and sovereignty. Such respect is paramount, maintaining national stability and pride. In contrast, weak governance invites chaos — imagine a scenario where a weakened Chile faces claims from land-locked Bolivia to cut through Chile’s northern territory to access the Pacific coast, or Argentina reasserts bolder claims over the Strait of Magellan boundary.
Chagos Islands: The unfortunate slide in UK Property thinking
This thought experiment serves to illuminate the potential consequences of the UK’s current actions over the Chagos Islands. For instance, consider the parallels with potential repercussions of a mismanaged Sale & Leaseback deal regarding sovereignty over territories like the Falklands or Gibraltar. The geopolitical implications could set a dangerous precedent that disrupt not only domestic policy but also international relations.
The Chagos Islands debacle exemplifies a troubling trend. While the average citizen might struggle to locate them on a map, the implications of such governmental oversight are profound and telling. Furthermore, the handling of this situation reflects a broader, more disturbing trend: a growing disregard for the sanctity of Property that underpins the nation’s legal and economic framework.
Representing the UK
Every seasoned CRE investment professional understands that the allure for any international investor coming to London is based upon predictable risks and the famed British adherence to the rule of law. This principle has attracted international investors, seeking stability and transparency. However, this bedrock principle is now taken for granted—at our peril.
The crumbling pillar of Property
Since the 1960s, the concept of Property has gradually been muddled in political and social discourse, and now fraught today with emotional debates about inequality and legacy issues of feudalism, colonisation, &tc. Yet, at its core, the place of Property remains a fundamental institution, interwoven with our rights to live, create, and prosper. It’s not merely about real estate and trophy assets towering above the City of London; it’s about a broader societal framework that supports individual liberties and collective progress.
The integration of property rights into societal norms is enshrined in the Universal Declaration of Human Rights, Article 17, which highlights the right to own property safely and freely. This is not just about legal entitlements; it’s about maintaining the fabric of a free and orderly society.
Article 17
Universal declaration of human rights
1. Everyone has the right to own property alone as well as in association with others.
2. No one shall be arbitrarily deprived of his property.
Readers of all political persuasion would do well to note that Article 17 does not simply declare that every individual has a right to own a piece of property.
Media and research missteps
Western governments, as ever, do not act in isolation. Think tanks, academics and political journalist/activists all share in the task to create a fertile ground upon which we can discuss, devise and advance new ideas to improve the approach to Property. There is always room for improvement.
Yet regrettably, today’s debate appears to be skewed by sensationalist media and ill-conceived academic research papers. Commentators seem to dabble in house price speculation, land banking dynamics, construction supply chain matters – but rarely rooted by an overarching view of Property and its essential human and market qualities.
This week’s suggestion for a ‘UK exit tax’ by the Institute of Fiscal Studies is akin to Costa Rica and Cambodia, where paying departure fee to get out of the country is the norm. More longer-circulated proposals in the grandiosely titled ‘Land for the Many’ (2019) report signals a willingness to shift the political ground at the expense of long-held truths about Property. i.e. suggestions to take resources and title from 3rd parties without proper justification. Anything achieved by roughshod means would be a disservice to decades of UK political stewardship across the ‘left-and-right’ divide.
An example of some perplexing research quoted in the ‘Land for the Many’ emanates from Cambridge University. The peculiarly narrow research is used to argue that there are no significant Property or housing implications emanating from the hot topic of today: immigration. If anything, the often quoted (~200 times) Cambridge paper suggests that home prices will helpfully decline by -1% in Cities following a new population influx. Let that supply-and-demand Phd-approved conclusion sink in.
We cannot afford silence around the place of Property
As we face many critical challenges and volatile times, the function of Property and its governance in the UK must be constantly revisited and vigorously defended. We need more Think Tanks, RICS, the English Speaking Union and the likes of the British Property Federation to contribute different perspectives for debate. There must be a defence of private property in the face of Property reform proposals that may be rooted in, at best, short-term 1st-order consequences, or at worst the politics of property envy.
Property principles have made Britain a beacon of historic enterprise, investment and relative stability. They must be better protected, especially as government policy becomes less predictable and not defended in proper manifestos in advance of the ballot box. The risks will increase if the ‘Land for the Many’ or similar forums manage to influence the upcoming UK legislative programme. It is imperative for RICS professionals, academics, and the media to engage in a more balanced discussion to steer the UK back towards a path that respects and upholds the sanctity of Property.