Even with the holidays on the horizon, the general election has managed to take centre stage this December. We’d all rather be getting ready for winter festivities, but this election has the power to drastically change the landscape of the UK housing market. With that in mind, it’s definitely worth thinking about what could happen if either of the major parties win.
It looks like Labour and the Conservatives will be the front-runners for this one, so we decided to look at each party’s manifestos to see how their policies will affect the housing situation.
Labour’s Housing Policies
Jeremy Corbyn and the Labour Party have addressed housing policies during this general election campaign, and they have come up with several changes they want to implement if they get into No.10.
Labour’s manifesto mentions how their party promised to improve the UK housing market for every citizen back in 1945. They say they are going to renew this pledge, making sure that “everyone has a decent, affordable place to call home.”
Mr. Corbyn’s plan to fix the housing crisis involves creating a new Department for Housing. He believes this will help Labour “act on every front.” In short, the Department for Housing should help bring costs down while bringing standards up, makeHomes England a more accountable national housing agency and help the construction sector flourish with a skilled and happy workforce.
Labour also plan to make buying land cheaper as long as it’s being used to build more low-cost housing. They say public land will not be sold off to the highest bidders who would then be able to use the land for their own means. And while we’re on the subject of land, Labour plan on making brownfield sites a priority for new developments to protect the green belt.
Help Towards Home Ownership
Both major parties say they’re putting focus into helping more people buy properties, in particular those who are still waiting to take their first step onto the property ladder. Labour’s manifesto states “numbers of new affordable homes to buy have fallen, and fewer young people can afford their own home.”
Their aim is to build more low-cost homes that will be reserved for first-time buyers in every region of the UK. To aid in this, they plan on reforming theHelp to Buy scheme so it focuses on first-time buyers who are on ordinary incomes, and they also want to give local people the chance to buy new properties built in their area before considering any other offers.
Updates to the Rental Market
There are more than 11 million people in the UK who rent from a private landlord. Because of how many people come under this demographic, Labour is also taking a new stance on rental agreements.
Their first port of call seems to be capping rental figures in line with inflation. They also want to give individual cities the power to cap rents further. Ultimately, this move should stop unscrupulous landlords from charging extortionate amounts for the use of their properties.
Labour say they want to make sure tenants feel safe and secure in their rented homes. They believe their new policies allow for open-ended tenancies which will stop no-fault evictions. Plans are also in place to raise the minimum standards set out for rented properties, and they will enforce tougher sanctions on landlords who break these new rules.
The Conservative’s Housing Policies
Boris Johnson hasn’t been in No.10 for long, but he doesn’t plan on handing the keys to Jeremy Corbyn any time soon. In an effort to land as many votes as possible, the Prime Minister and the Tories have laid out their own plans for the UK housing market in theConservative Manifesto.
The Tories state that “there has been a considerable increase in homebuilding” since they came into power back in 2010, and that 1 million homes have been built in the last five years across England. Their aim is to carry on with this trend, and the plan is for them to build 300,000 homes a year by the mid 2020s.
Help on the Property Ladder
Much like the Labour Party, the Conservatives are promising to help young, first-time buyers get on the property ladder. Their approach to manage this involves encouraging more long-term fixed mortgage rates to reduce the costs of deposits.
Mr. Johnson also wants to offer more homes to local families by enabling councils to use developers’ contributions to cut the price of homes by a third. The Conservatives are keen to highlight councils could use this scheme to give key workers in the area — such as police officers, teachers and nurses — a chance to buy a home they otherwise wouldn’t be able to afford.
In regards to the Right to Buy programme, Tory officials say they will maintain their commitment to help council tenants with their dream of home ownership. They will do this by extending the scheme from 2021 to 2023, and they will review new ways to support home ownership once the scheme is completed.
In Regards to Renting
The Conservatives also want to make changes to the rental market, claiming they will “bring in a better deal for renters.” Part of their plan to do this involves abolishing “no fault” evictions — a policy Labour feel strongly about, too — and establishing “lifetime deposits” that moves with the tenant.
They believe this will help both tenants and landlords as it will supposedly create a fairer rental market. Renters will be protected from “revenge evictions,” and good landlords will have their rights of possession strengthened.
The Tax Implications
New policies to the UK housing market are all well and good, but the money for them has to come from somewhere. Both parties are keen on the idea of getting local people into homes within their community, and they plan on doing that by making it more costly for offshore investors to buy here.
Labour say they will impose a 20% offshore property levy on top of Stamp Duty Land Tax for foreign companies and trusts. As for the Conservatives, they will add an SDLT surcharge of up to 3% on offshore investments.
To make sure properties are being inhabited by those who need them, Labour claims it will allow local councils to tax empty properties and second homes used as holiday homes up to 200% of the current council tax rate.
For property investors, Labour has hinted that they would set capital gains tax at the same rate as income tax. The Conservatives, on the other hand, have confirmed they will not be reducing corporation tax by 2% as previously stated, but they have committed to keeping National Insurance, VAT and income tax at the same rate.
What Does All This Mean for the UK Housing Market?
No matter which party comes into power, it’s clear to see that huge changes are coming to the UK housing market.
The important thing to remember is that estate and lettings agents need to understand the new rules that could come into play to make sure properties are still being sold and rented fairly for everyone involved.
If you’re unsure about how the UK housing market will be affected by the general election, know that your local property agency will be able to give you the best advice.
Till next time…