The recent Conservative and Labour Party conferences highlighted that the housing market remains a top priority for the nation’s politicians.
This was demonstrated by several high-profile housing proposals put forward by both parties at a time when Brexit negotiations continue to dominate the political agenda.
With the Budget due out later this month, it’s clear politicians still believe that voters can be swayed by key housing policies.
Increased stamp duty for overseas buyers
At the Conservative Party conference, which took place in Birmingham between September 30th and October 3rd, Theresa May pledged to increase stamp duty on property purchased by foreign buyers by up to 3%.
She said it “cannot be right” that it’s “as easy” for individuals not living in the UK to buy homes here as it is for domestic buyers.
“This proposal is clearly designed to help property buyers living in the UK and will be welcomed by those trying to get on the housing ladder,” says Neil Cobbold, chief operating officer of PayProp UK.
“However, one potential downside is that it could make property investment in the UK less appealing to overseas investors, something which could have a significant impact on the supply of private residential rental stock.”
Gareth John, Managing Director of estate agent software AgentPro added:
“My concern with this potential policy is that foreign investors don’t buy evenly across the UK. They often invest in places like London, where house prices are already being impacted by the double whammy of Brexit fears and increased stamp duty – I think the way forward is to make it easier for local buyers, rather than disincentivising overseas buyers. Qualified property professionals, like chartered surveyors and estate agents, who know the market, have repeatedly said that removing the highest level of stamp duty would get the capital’s property market moving again. Our Government needs to listen to the experts.”
An ombudsman for the new build sector
Another policy unveiled at by the Conservative Party is the plan to introduce a new ombudsman solely to oversee the new homes sector.
The party says it intends to make sure that all developers belong to an ombudsman scheme to provide more protection for consumers.
“It’s important that consumers purchasing new homes from developers have access to impartial redress, particularly considering the leasehold scandal that has plagued the sector in recent years,” explains Cobbold.
“However, it remains to be seen how this new ombudsman fits in with the government’s previous plans to introduce a single ombudsman overseeing redress across the entire housing market,” he says.
Labour continues to focus on the rental market
Meanwhile, at the Labour Party conference, held between September 23rd and 26th in Liverpool, the housing discussion focused heavily on the private rental sector.
Labour’s shadow housing minister, John Healey, pledged to scrap Section 21 evictions, which allow landlords to regain possession of their property for no specific reason.
He said that if the party were to come into power it would also introduce three-year tenancies, introduce rent controls in some cities and launch “renters’ unions” with the aim of putting “power in the hands of tenants”.
“Labour’s proposals continue along a similar path as those it has put forward over the last few years, with a strong focus on the rental sector and helping private tenants,” says Cobbold.
“Research shows that Section 21 evictions are currently the most common way for a landlord to regain possession of their property, so there would need to be a feasible alternative introduced if the rental market were to function properly without Section 21.”
“What’s more, introducing further restrictions on the private rental market could make operating conditions more difficult for landlords and letting agents, which could have significant unintended consequences for the rental market,” adds Cobbold.
More details expected in the upcoming Budget
Later this month, Chancellor of the Exchequer Philip Hammond will deliver the Budget, which has been brought forward to accommodate Brexit negotiations.
“We expect more details on some of the Conservative proposals to emerge in announcements,” says Cobbold.
“Further information would be welcome on outstanding housing plans outlined over the last year, and there’s always the potential for the odd property-related surprise, as we’ve seen in previous Budgets,” he concludes.