Our homes

I remain extremely concerned at the level of wild statement and misleading conclusions which are being presented as facts by those who want the old rent laws to be somehow scrapped.

It is of course entirely fair to want to scrap them, particularly if you are unlucky enough to be a landlord getting no return, and short for cash while your tenant enjoys the good life! These cases do exist.

It is unfair and unethical though to make wild claims about the effect of this potential scrapping. If they need to be scrapped to give justice to landlords, then scrap them, but do not claim this is going to produce a glut of affordable housing because it will not.

Recently, Alternattiva Demokratika went even further than some contributors did in The Sunday Times (October 10). They first attacked the prime minister. for saying property prices rose by 30 per cent in the last year. They claim they did not. The truth is that they did go up by that amount in certain projects in certain areas and by less in others.

Factual information is very hard to find in the Maltese property market, and we all know, though few publicly admit it, that underdeclaration is still rife, despite the measures Government has put in to reduce it. I know just by looking at files at the Housing Authority that the prices people claim they are selling their property for are just ridiculous.

Only lately, when a client was complaining about having to pay us back a percentage of the subsidy enjoyed, she told me she sold at a certain price when it transpired she sold for 50 per cent more!

The estate agents will tell you things are really bad while at the same time banks are registering extremely good business in the home loans area. Some will tell you there is a glut of property available, while estate agents will complain that there aren't enough of the right homes available for them to sell.

I worry when I hear AD talk about this area because they are, on the whole, very badly prepared and informed about the property market. If that same level of misinformation is being used in other areas where I do not claim any detailed knowledge, it is indeed worrying if this could be the new potent force which is influencing thinking public opinion.

They could, on the other hand, change tack and look at the areas which need reform in a sober way, and present solutions and likely outcomes which are realistic. It is very disappointing to hear them talk like only old socialists talk today, and claiming that rises in property prices are a social disaster. This is the kind of talk you find in certain parts of the press and among certain people who read that press.

Let us be honest. Aren't most of these AD exponents home owners, as are the majority of Maltese and Gozitans? Didn't the absolute majority of them do well out of being home owners? What is this grudge factor all about?

Let us be positive instead and talk about how we can have more affordable homes in Malta. Cannot they come up with one realistic solution except scrapping the old rent laws?

Let me say it again. If the rent laws were scrapped and the current tenants slowly started to pay market rents there would be absolutely no effect on property prices.

Here in Malta the world of old fixed rental and of sale do not impinge on each other at all. The usual laws of supply and demand do not, either, because if they did the number of empty homes would bring down prices. But they haven't, and they don't, and there is the crux of the problem. AD claim that if the old rent laws did not exist somehow our housing problems would ease.

Today if your property is empty and that means your tenant has left, you can put the property back on the market. You can rent it out (because the government did give us new rent laws) and basically the tenant has no security of tenure at all.

It is common practice for these new tenancies to be rented out at, say, Lm100 a month for the first year, rising to Lm1,000 a month in the second, so that tenants are forced to actually agree to a new rent level, and will have to leave if they do not because clearly Lm1,000 a month is normally an absurd rent in Malta.

So if your property is empty in Malta today it is definitely not the old rent laws which are stopping you from bringing it back into the market. These are the usual reasons landlords or owners will give you for keeping a property empty:

¤ it's caught up in an inheritance and the family cannot agree what to do with it

¤ I would rather leave it empty than have the hassle of tenants

¤ I am leaving it for my children

¤ it needs expensive repairs; I would rather let it deteriorate and one day pull it down and build flats (around 12 per cent of empty properties are in a bad state of repair)

¤ it's my summer home though I do not use it as such

¤ it's my investment, that area might go up in value one day and, last but by no means least...

¤ if I rent it out and Labour gets elected they may bring in the old requisition again and I would lose the property forever

People who are uninformed about this area could read AD statements like: "The PM's statement is yet another confirmation of the urgent need to reform the property market and eliminate the artificial pressure that our outdated rent laws are exerting on the price people have to pay for their home."

Now this is extremely misleading and is actually good old-fashioned socialist talk. From the latest statistics provided in this area close to three-quarters of us own our own homes, and only around 15 per cent have any form of a loan at all! How did this happen despite having this so-called rent law noose around our necks? What is AD talking about? If the rent laws were killing the property market we would not have these enviable statistics.

Of course, this is just talk to appeal to those who feel left out because they cannot join the property ladder. Instead of appealing to that great Maltese ghira why don't AD and others propose some sensible measures to have more affordable housing?.

My humble suggestions would be the following.

On new build sites. When developers submit plans to MEPA on sites above a cetian area (MEPA could also look at a cluster of small sites of the same developer), the developer would have to sell some units at a lower profit (not at a loss!) to get his or her permit.(otherwise called planning gain).

The Housing Authority could be used as the clearing agency and the property sold on to our clients whom we check very carefully in tems of income and assets, etc.

In rundown areas. There are certain areas of Malta where you have a lot of tiny empty old properties - Hamrun, Birkirkara, Qormi - which would make ideal starter homes. Government must give specific tax incentives in specific areas to encourage young people to buy them up and do them up

In historic cores. Many of these, not surprisingly, have been done up but Valletta and part of Cottonera remains a challenge and it is pretty obvious that the cost of buying in Valletta today is so exorbitant that even an average couple would find that loan plus the cost of doing the property up exorbitant.

Again, I would recommend middle class tax breaks even for those on a good income, to further boost what is already a Vallettta in the beginnings of regeneration. Of course Government must lead by example and those empty properties in Valletta must either be sold or converted to provide housing, particularly some decent housing for older people (who are actually suffering from the worst housing conditions, as our Care and Repair service shows), whom nobody seems to mention in Malta.

AD wants you to believe that scrapping the rent laws will give us more affordable housing. It will not. Reforming the rent laws is not a matter of economic reform which is going to somehow make property prices rise only when governments or aspiring Opposition parties want them to!

Reforming them or, more specifically, scrapping the right of inheritance is an issue of social justice. In my view this should be acted on right away. It would deflate the wild promises immediately.

Ms Micallef is the chairman of the Housing Authority