On 8th June 2017, the UK will vote in a snap General Election for the party to lead the country as it begins negotiations to leave the European Union. With Brexit taking a front seat in political debates, and with Prime Minister Theresa May holding the election to strengthen the Conservative Party’s hand ahead of the talks, there has been less debate about another issue that continues to shape the country: housing.
Since the EU Referendum last year, the buy-to-let sector has undergone dramatic changes, in the form of a landlord tax hike, while the stamp duty surcharge introduced in 2016 resulted in a temporary slowdown in sales, although price rises continue to be underpinned by a shortage of supply. London has seen its prime market cool until the start of 2017, while regional cities, particularly in the Northern Powerhouse, have led overall house price growth, attracting workers and investors to the region.
With the pound weaker than before the Brexit vote, the international appeal of UK real estate, with its market fundamentals still in tact, remains strong. However, what would a change in political party mean for the housebuilding industry, buy-to-let investors, agents and buyers?
As the incumbent party, the Conservative Party campaign for the election does not introduce many new measures. With both the Labour Party and the Liberal Democrats hoping to win their fair share of votes, though, there are many possible property policies being proposed. All three parties place a focus on boosting the construction of new homes and all three also plan to ban letting agent fees for tenants.
“We are simply not building enough homes to meet the demand from both the private rented and sales sectors,” comment Mark Hayward, Chief Executive of the National Association of Estate Agents Propertymark and David Cox, Chief Executive of the Association of Residential Letting Agents Propertymark. “We are concerned that housing has become a political football for future governments to score points against each other and this is getting in the way of actually ensuring we have the right sort of houses available, in the right areas, across all tenures, to provide the homes that people need.
“Only 32,000 affordable homes were built in 2016, which hasn’t made a dent; although the parties are pledging to build hundreds of thousands of new homes, we need to seriously consider if such pledges are even remotely practically possible. As we have said many times, we need to take the politics out of housing and consider other ways to ease the pressure on housebuilding that will allow us to provide a more accessible and affordable housing market for all.”
What should investors expect from June’s vote? We round up the main housing pledges made in each party’s manifesto:
1 million new homes
Labour will invest to build over 1 million new homes and, by 2022, will be building “at least 100,000 council and housing association homes a year”. It will remove government restrictions that stop councils building homes and begin the “biggest council building programme for at least 30 years”.
Department for Housing
Labour will create a Department for Housing to focus on tackling the housing shortage in the UK. Improving the quality of homes will also be a focus, while the Homes and Communities Agency will become the party’s housing delivery body.
Labour will prioritise building homes on brownfield sites and protect the country’s green belt, with a new generation of New Towns to avoid urban sprawl across the countryside.
Help to Buy until 2027
The current Help to Buy scheme will be continued until 2027 to provide “certainty to both first-time buyers and the housebuilding industry”.
Local Buyers First
Local buyers will be given first dibs on new homes built in their area.
4,000 Homes for Rough Sleepers
Labour will make 4,000 additional homes available for rough sleepers to combat homelessness.
Labour will introduce an inflation cap on rent rises.
Labour will make three-year tenancies the norm, with renters given new consumer rights.
Letting Agent Fees
Labour will legislate to ban letting agency fees for tenants.
Right to Buy Suspended
Labour will suspend the controversial Right to Buy scheme to protect the supply of council houses, with councils only able to resume sales if they can “prove they have a plan to replace homes sold like-for-like”.
Bedroom Tax Scrapped
Labour will scrap the bedroom tax, which it describes as “punitive”.
Rough Sleeping Halved
The Conservative Party will “halve rough sleeping over the course of the next parliament and eliminate it by 2027”.
Commitment to White Paper
The Conservative Party will meet its 2015 commitment to deliver a million homes by the end of 2020 and will deliver half a million more by the end of 2022. The recent housing White Paper will be implemented to free up more land for new homes in the right places, speed up build-out by encouraging modern methods of construction and give councils powers to intervene where developers do not act on their planning permissions.
New Council Housing Deals
New Council Housing Deals will help “ambitious, pro-development, local authorities” to build more social housing, providing them with low-cost capital funding to create new fixed-term social houses, which will be sold privately after 10 to 15 years with an automatic Right to Buy for tenants, the proceeds of which will be recycled into further homes.
The Conservative Party will continue its £2.5 billion flood defence programme that will put in place protection for 300,000 existing homes by 2021.
The Lib Dems promise to help young people in need by reversing cuts to housing benefit for 18-21-year-olds, which were made last month by the government.
Rent to Own
The Lib Dems will introduce a new Rent to Own model, where rent payments give tenants an increasing stake in the property, owning it outright after 30 years.
Ban Letting Agent Fees
The Lib Dems will ban lettings fees for tenants, capping up-front deposits, and increasing minimum standards in rented homes.
Help to Rent
A new Help to Rent scheme will provide government-backed tenancy deposit loans for all first-time renters under 30.
UK Buyers First
Developers will be stopped from advertising homes abroad before they have been advertised in the UK.
Three-year tenancies will be introduced, with an inflation-linked annual rent increase built in to limit rises in rental rates. Mandatory licensing will also be introduced for landlords.
First Refusal for Renters
Tenants will get first refusal to buy the home they are renting from a landlord who decides to sell during the tenancy.
300,000 Homes a Year
The Lib Dems have a target of building 300,000 homes a year by 2022, including direct building by government.
10 new Garden Cities will be created in England, providing thousands of high-quality new zero carbon homes, with gardens and shared green space, jobs, schools and public transport.
A new government-backed British Housing and Infrastructure Development Bank will be formed, with a remit to provide long-term capital for major new settlements and helping attract finance for major house building projects.
End Right to Buy
The Lib Dems will end the voluntary Right to Buy pilots that sell off Housing Association homes and the associated high value asset levy.
Lend More to Housing Associations
The borrowing cap on local authorities will be lifted, increasing the borrowing capacity of Housing Associations so that they can build council and social housing.
Enforce Affordable Home Requirement
The Lib Dems will scrap exemptions on smaller housing development schemes from their obligation to provide affordable homes, and strengthen the hand of local government to prevent large developers reneging on their commitments.
Planning Appeals System
A Community Right of Appeal will be created for cases where planning decisions go against the approved local plan.
Council Tax Hike on Second Homes
Local authorities will be able to charge up to 200 per cent council tax on second homes and ‘buy to leave empty’ investments from overseas.
Public Sector Land
The Lib Dems will enforce house-building on unwanted public sector land
“Excessive land-banking” will be penalised when builders with planning permission have failed to build after 3 years.
More political party manifestos will be added in the run-up to 8th June 2017.Google+