Editor,

There are currently many proposals which aim to improve the prospects for local young people to find homes in West Wales. It is possible that however well intentioned, some of these may prove counterproductive. For example, the upcoming changes to the regulations concerning residential lettings in Wales may well make it nigh on impossible for older housing stock (of which there is a lot in Ceredigion) to be let. Landlords may simply sell up; some will see this as a desirable consequence of the policy, but it is by no means certain that local people will be in a position to buy such properties. One local Estate Agent has told me that demand is being led by buyers moving into Ceredigion. If this happens, the unintended consequence will be higher rents and higher house prices, exacerbating the whole situation.Indeed, for people who can work remotely, Ceredigion is a very attractive place in which to relocate. This process has been accelerated by Covid, and improved connectivity. In the long term, it is critical that more value-added jobs are created within Ceredigion, in manufacturing, IT, services etc, and that our young people are equipped with the skills to obtain these jobs. The Welsh Government has failed to deliver either of these critical objectives.

Meanwhile we need to urgently address how we provide starter homes for local young people, preferably as owner occupiers, so their hard-earned money is working for them, rather than going on rent. Ceredigion Council’s plan to develop a shared equity scheme is a good idea, but it applies to new build homes, and there is always a risk that direct (local) Government intervention actually drives up prices further.For a long time, Ceredigion Conservatives have proposed a scheme that would go much further.Within Ceredigion there are multiple old farm buildings, many of which are too small for modern agricultural usage. Maintaining such buildings generates no return for the owners and so they are often left empty whilst their condition deteriorates.

The Ceredigion Conservative Association believes that it would be very easy to incentivise the owners of such buildings to develop them as “starter homes for local young people”, based on a shared equity model. Importantly no Government intervention would be required (local, national or UK) other than keeping out of the way!

The owner would renovate the buildings to create small but comfortable starter homes and his or her own expense. They would ideally be aimed at young couples. The key eligibility criterion would be that the occupants were employed locally. The occupiers would purchase 50 per cent of the equity value of the property. There would be no ground rent, but the occupiers would be entirely responsible for maintenance of their property. So, from the occupiers perspective it would be like owning their own home for 50 per cent of the true cost of purchase. In the assumption that their incomes would increase over time, and they might start a family, it is likely that after a few years the equity they had built up would allow and encourage them to move up the housing ladder, creating a vacancy for the next young couple.In the event of either the original owner or the occupier selling, then the other party would have first refusal at fair market value.

The benefits to young occupiers are obvious; their own home for 50 per cent of the true cost with no additional rent to be paid. For the original owner, the benefits are less obvious but nonetheless very real, so long as the government agrees to keep out of the process. Essentially, so long as the properties continue to roll over in this scheme, they should be tax-exempt; no VAT on renovation, no Capital Gains Tax and no Inheritance Tax for the full value of the property, in perpetuity. In essence, Government would incentivise this by giving the owner an IHT break. But this is on buildings that were previously generating no tax at all, and when occupied will of course generate Council Tax.

Putting properties into this scheme would therefore resolve the owners’ headache of what to do with them, generate a modest return on the renovation, and allow them to accumulate capital value which could of course be used to leverage finance for other (hopefully) local investments. If the original owner sold to another “owner” they would have the option of continuing the scheme with the same tax benefits. If the property were brought out of the scheme these benefits would immediately go. If ever the property was converted to a second home or holiday home, then the owner who did this would have to repay all tax breaks right back to the beginning.

So it is a win, win, win situation for all parties relying on local people solving their own problems. No one party (owner, occupier or government) walks away with loads of money, but there is very definitely something in it for everyone. This scheme alone won’t solve all of our housing problems, but it would make a very good start. It is also worth remembering that the Carbon footprint of a renovation is far lower than a new build; so that’s another win!

Patrick Loxdale, Chairman, Ceredigion Conservative Association, Llanilar