The General Election and Housing

Buyers and sellers are proving determined to press ahead with their home moves despite the looming General Election.

But as July 4 fast approaches latest research from the Royal Institution of Chartered Surveyors suggests confidence in the UK’s housing market is gradually decreasing despite the flurry of positive news during the second quarter of the year.

Demand is continuing to significantly outstrip supply in the private rented sector creating a huge mismatch and leaving renters with rising living costs and plummeting affordability levels.

Meanwhile fading hopes of a cut in interest rates alongside the continuing cost of living crisis has led to a small drop in new buyer demand.

Justin Young, Chief Executive, of the Royal Institution of Chartered Surveyors, says: “While both the Conservative have staked their claims as being the party of home ownership for that to be the case, greater attention must be paid to improving conditions for Generation Rent.

“This particular demographic – typically made up of people aged between 18 and 40 – has doubled in the last two decades, so politicians need to focus on them, as well as homeowners, as a means of gaining the support of a growing portion of the electorate.

“The housing market needs policies that think longer term, not short, and awareness that the different tenures are interlinked, so there is no one solution that will fix the situation.”

With that in mind, let’s take a look at what three of the main political parties are offering homeowners and would-be buyers should they take the keys to Downing Street next month.

CONSERVATIVES

Prime Minister Rishi Sunak has announced a new two-year temporary tax cut for landlords if the Tories win the General Election next month saying that they will introduce capital gains tax relief for landlords selling their property to tenants.

Ground rents will be capped at £250 and then reduced to a peppercorn level, as was previously promised in the Leasehold and Freehold Reform Bill.

And he has also promised to abolish Stamp Duty for first-time buyers on properties worth up to £425,000, and to reintroduce the Help to Buy scheme.

Under that proposal, first-time buyers with a 5% deposit will get help for up to 20% of the cost of a home, and the mortgage guarantee scheme will continue.

And the Conservative manifesto also includes a commitment to build 1.6 million new homes in the next parliament by speeding up planning.

The Renters (Reform) Bill will be revived with a renewed promise to scrap Section 21 ‘no fault’ evictions and councils will be given new powers to deal with holiday lets.

LABOUR

Labour leader Kier Starmer’s big housing offer was ‘Freedom to Buy’ – a scheme to help families who struggle to save for a large deposit and can’t rely on cash gifts from relatives via a permanent mortgage guarantee scheme.

He has also pledged to overhaul the planning system that has been holding the country back from building new homes.

The party has a target of building 1.5 million homes within five years, and an overhaul of planning will be key to achieving that aim.

Labour earlier revealed that if the party gains power it will launch a replacement to Help to Buy to give approximately 80,000 young people a chance to get onto the property ladder.

Other initiatives announced for the housing sector include a ‘first dibs’ to new homes policy for local people; taxing foreign property owners to fund more planning officers; and reforming the compulsory purchase rules to stop ‘speculators’ holding on to properties.

Labour has also promised to scrap Section 21 ‘no fault’ evictions on “day one” of a new government.

LIBERAL DEMOCRATS

The Liberal Democrats are promising to create 10 new ‘garden cities’ and remove dangerous cladding with no cost to leaseholders.

The Lib Dems series of housing pledges also includes new powers for local councils to raise council tax by 500% on second homes and holiday lets.

There is a target of 380,000 new homes built every year and financial incentives for developers to build on brownfield sites, and measures to take planning approval away if building doesn’t start.

They also want to give local authorities new powers to control second homes and short-term lets in their areas, allowing them to increase Council Tax by up to 500%.

And the Lib Dems also propose to properly fund local planning departments to improve planning outcomes and ensure housing is not built in areas of high flood risk without adequate mitigation, by allowing local authorities to set their own fees.