With the upcoming general election looming large, the battle lines have been drawn and each party is pulling out all the stops in order to win your vote. Housing may not have been a focus point during election campaigns of the past, but this time around it is central to much of the debate, especially when the discussion is focused specifically on the London area. With a few days to go until the polls open, let’s take a look at what each party is offering voters with regards to housing policy and how these proposals will affect buyers, tenants and landlords.
Ed Milliband plans to scrap the Stamp Duty charge for first time buyers on properties up to £300,000. The Stamp Duty tax, is regarded by Labour as too hefty a charge to expect young first time buyers to fork out, considering deposits and tenancy fees are also required before mortgages are granted. The tax would still need to be paid in full by anyone buying a property over £300,000. Labour is also promising to introduce a first call policy, giving first refusal over homes newly placed on the market to those who live in the areas where the properties are on sale. Those who have lived in an area for 3 years or more would be given 2 months to buy a local property before it is placed on general sale. It is thought that this approach would encourage neighbourhoods to retain their community feel and stop people being pushed out of the places they grew up in.
The Labour party have also detailed plans to ban real-time rent rises, through replacing one year tenancy contracts with 3 year contracts in which rents are fixed in advance. Aptly known as the Rent Control Policy, this policy involves tenants and landlords negotiating a rental cost prior to the tenant entering into a 3 year contract, that can only increase in cost at the rate of inflation. Tenants would be able to terminate their contracts after one month, whereas landlords would be required to give 2 months notice.
Critiques of Miliband’s rent control scheme have spoken out about how it would drive up rental prices at the beginning of tenancies and London Mayor Boris Johnson has described the scheme as drivel stating: “First of all you would discourage people from getting into the rental market.”
Launching their manifesto in Birmingham, the conservatives pledged 100,000 new starter homes for first-time buyers under the age of 40, at a discount of 20% should they win the next election. They also pledged in their manifesto a Rent to Buy scheme, which will allow young people to rent homes at discount rates with the option to buy them at a later date. Under the proposed scheme individuals will be able to rent at a lower rate and use the money saved to put down a deposit. After a minimum of seven years the tenant will be given the opportunity to either buy the property, or to move out. Critics of this scheme argue that it only serves those who are already in social housing – of which there is a shortage. It has been argued that the scheme will do nothing to help those in insecure expensive private rental contracts looking to find homes and those still living at home with parents. There is currently a crisis in social housing, which the Conservatives have been criticised for neglecting to address. Instead they are accused of opting to sell off the current stock and neglecting to build any more homes for rent only.
A future Tory government would also force councils to sell off their most valuable homes, to be replaced by affordable new housing in the same area. Some of the funds from the council house sales would be used to pay for the extension of the Rent-to-Buy scheme.
The last to launch their manifesto The Lib-Dems have dedicated 9 full pages to housing in their manifesto. A plan to create five new garden cities, to address the housing crisis in the South-East is one of their headline policies. They also seek to give councils the right to suspend the Right to Buy scheme which they claim has been enormously damaging. They plan to build 300,000 new homes a year to address the housing crisis and have backed Labour’s proposal for a Help to Build scheme, to increase the supply of social housing.
They also believe that the central government should have the power to build new homes. The Lib-dems are also in favour of giving social landlords more control, with the view that this would allow them greater flexibility with regards to rent charges and allow them to take account of the whole cost of occupancy. It is hoped that this would encourage landlords to invest in ways of reducing heating costs, thus cutting fuel poverty. Critics say that more autonomy for social landlords would simply result in higher rents in these types of properties.
There are a number of contrasting and interesting policies being proposed and with time things will become clearer. It’s already clear that resolving the current ‘housing crisis’ will require a thought-out plan involving stakeholders from all parts of the housing chain. The current ‘crisis’ has been created by both long-term government policy and market forces. In-order to overcome the current issues both of these have to be considered when establishing a definitive housing policy that will be effective today and in the future.
No matter what happens to government policy landlords and sellers will always require the assistance of a qualified, knowledgeable agent. We pride ourselves on our local area knowledge and our staff undertake continued professional development to ensure we can offer you the best advice possible. Worried about how the election may affect you and the value of your home? Call us today on 020 8509 0444 or contact us via our enquiry form and we will call you when you are available.