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Election 2019: How will it affect your property plans?

There’s not long to go until Britain goes to the polls. But what are the parties saying about housing?

Will @ Nested
Property market insight

The General Election campaign is well underway, and we can hardly contain our zzz...zzzz...zz... excitement!

But in all seriousness, whichever way you’re voting, this is one election that can be safely filed under momentous. While there are many issues to consider when you vote, we thought we’d put each party’s property plans under the microscope.

Conservatives

The Tories have been drip-feeding their manifesto pledges throughout the campaign. Here’s what we know about their housing commitments so far:

  • A 3% Stamp Duty surcharge for non-UK residents. This would apply to individuals as well as companies. The Tories say it will raise £120m to tackle rough sleeping.
  • A ‘First Home’ scheme, giving first-time buyers a 30% discount on new properties in their local area.
  • A pledge to build ‘at least’ one million new homes over the next 5 years.
  • The introduction of lifetime fixed-rate mortgages. These new mortgages would be designed to help renters buy their own homes with a 5% deposit, with level payments until the home is paid off.
  • An “overhaul of the planning system”, they say.
  • A pledge not to use public money to build housing, but instead, to encourage the private sector to build more.
  • An end to ‘no-fault evictions’ — known as Section 21 evictions — where tenants can be forced out of properties for no good reason.
  • ‘Lifetime Rental Deposits’, enabling renters to transfer deposits from one property to the next.

Labour

The Labour Party manifesto promises to close “the gap between the housing haves and have-nots”. The pledges include:

  • A commitment to build at least 150,000 council and social homes a year by the end of the parliament.
  • The creation of a new Department for Housing, as well as an English Sovereign Land Trust. The latter will be granted powers to buy land to develop for housing, with brownfield sites the priority.
  • A new definition of ‘affordable homes’ linked to local incomes, rather than ‘80% of market value’.
  • The sale of new leasehold properties will ‘end’, with a commitment to allow leaseholders to buy their freehold at an affordable price.
  • The introduction of rent controls, linked to the rate of inflation.
  • A new zero-carbon homes standard will be introduced for all new homes, with upgrades to millions of existing properties to make them energy efficient.
  • New powers for councils to buy back homes from private landlords.
  • A new levy on overseas buyers, with ‘first dibs’ for locals.

Liberal Democrats

  • A commitment to build at least 100,000 homes for social rent each year, with an annual target of 300,000 for total house building.
  • A new ‘Rent to Own’ social housing model, where tenants can increase their stake in their home through rent payments. After 30 years they will own the home outright.
  • Control of Right to Buy will be devolved to local authorities.
  • Zero-carbon standards for new houses.
  • New local authority powers to increase Council Tax by up to 500% on second homes.
  • A Stamp Duty surcharge for overseas buyers.
  • A new Help to Rent scheme of government-backed tenancy deposit loans for first-time renters under 30.
  • Mandatory licensing of landlords, with the promotion of longer tenancies.
  • Stamp Duty will be graded according to the energy rating of a property.

What about the other parties?

We could talk all day about the other parties, but we won’t.

The Greens have pledged to create 100,000 new energy-efficient council homes per year, with ‘major heating upgrades’ for 1 million homes annually.

North of the border, the SNP earmarked £150m earlier this year to fund government-backed loans of up to £25,000 for first-time buyers.

The Monster Raving Loony Party say they’ll scrap Stamp Duty, as “stamps are expensive enough without having to pay duty”.

And last, but perhaps least, the Brexit Party have swerved putting a number on their house building targets, but have pledged to ‘accelerate the pace of development’.

Get Nested Done

We won’t tell you how to vote, but for the sake of balance, what are the naysayers saying?

Perhaps the Tories’ most eyebrow-raising pledge is the lifetime fixed-rate mortgage. Torsten Bell, chief executive of the Resolution Foundation — a think tank focused on living standards for those on low to middle incomes — suggested that the proposal carry a whiff of the 2008 sub-prime mortgage collapse.

“It’s a massive deal if they’re overruling the Bank of England on regulation, or getting on the nationalisation bandwagon with state-backed mortgages,” Mr Bell observed.

On the other side, the main criticism of Labour’s plans has centred on the cost of its £75bn house building programme, to be funded by increased taxes for the top 5% of earners, with Corporation Tax rising to 26% by 2022. The Institute for Fiscal Studies have described Labour’s tax plans as “not credible” while a group of economists have endorsed the plans in a letter to the Financial Times.

Whatever the reality, once December 12th is out of the way we can expect significant changes in the property landscape. So whatever issue is closest to your heart, read the manifestos and don’t forget to vote!

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