Will the result of July 4th benefit or harm the housing market?
As I write this, the country is in the middle of a general election campaign. By the time you read this, July 4th will have been and gone and you will know which political party is in charge.
The opinion polls currently suggest that the result of the election is a foregone conclusion with Sir Keir Starmer looking likely to be Prime Minister of a Labour controlled government. So, how could a change in government affect the property market.
In my experience, buyers and sellers always get nervous before a general election if it seems likely that there will be a change in government. However, also in my experience, once the dust has settled, things never really change all that much – the status quo is pretty much preserved.
It seems likely that the Labour Party will win the election with the Conservative Party coming a distant second. But, do their housing policies significantly differ? In many areas essentially not, it would appear. Both parties seem to have the same goals, although their routes to achieving these aims differ. There are, however, some differences.
Each party has indicated a desire to help first time buyers at a time that it is becoming increasingly difficult to get on to the housing ladder.
Labour is planning to permanently extend the Mortgage Guarantee Scheme, a scheme started by the Conservatives, that essentially involves the Government affectively underwriting mortgages, giving lenders the confidence to widen the scope of their lending capabilities to, possibly, a riskier sector of the market.
The Conservatives are proposing to renew the Help to Buy Scheme and to continue their Mortgage Guarantee Scheme. Their manifesto also includes a promise to make the temporary first time buyer Stamp Duty Relief on homes up to £425,000 permanent.
Whilst the conservatives are proposing this change in Stamp Duty Relief for first time buyers, they are also pledging not to increase the current Stamp Duty thresholds. Labour will not offer first time buyers this relief, with only Stamp Duty proposal being to increase the level of Stamp Duty payable by 1% for non UK residents.
Both parties want to encourage the building of new homes with Labour setting a target of five million new homes to be built in the next parliament and the Conservatives setting a target of six million. Both parties are pledging to look at the planning rules to ensure that their targets can be met and both parties are pledging to support an increase in Social Housing Provision, although Labour seems to be demonstrating a greater desire to assist and help the market in this regard.
And the lettings market? Both parties are committing to the abolition of “No Fault Evictions” whereby landlords can evict a tenant for no given reason.
This should increase a tenant’s security of tenure, without unduly “tying” landlords hands, as evictions will still be possible under certain, qualifying criteria.
In summary, both parties aims seem broadly aligned. Detailed scrutiny obviously reveals certain differences, but the overall objectives are similar. I can see no real reason why either party being in charge will have a huge effect on the market. As ever, if there’s anything you wish to discuss with regards to the property market, please give us a call!
