Housing Changes Imminent Following A Conservative Majority Government
The majority has been secured and the UK is set to ‘get Brexit done,’ after three years of backbiting, bickering and in-party feuding.
The Conservative Party ‘less is more’ approach to the election campaign has more than paid off gaining 47 seats and taking a majority government with 364 seats in the House of Commons whilst also relegating the Labour Party to their worst defeat since 1935.
Whilst many will be left reeling after the winter general election result, the housing market can start to prepare itself for the realisation of Conservative manifesto pledges in the coming months.
Prior to Boris Johnson becoming Conservative leader, he promised to overhaul the current stamp duty land tax (SDLT) threshold by scrapping the tax on properties worth less than £500,000.
However, since the promise made during the leadership campaign, Tories have been noncommittal on the scrapping of SDLT.
Foreign buyers can expect to face significant SDLT changes in a Conservative majority government.
Foreign investors are set to be face a 3% surcharge in SDLT. This follows a 1% increase already made by the party last year. The manifesto pledge claims this will add £120 million to governmental coffers.
First-time buyers and renters were considered in the manifesto and changes could see a 30% discount being offered to first-time buyers in the future.
Those with a 5% deposit could also benefit from a guaranteed fixed rate mortgage solution which promises homebuyers a guaranteed mortgage payment throughout the lifetime of the mortgage.
Private renters could see the introduction of a lifetime rental deposit if the pledges are enforced, enabling people to move more freely without the need to raise deposits.
Furthermore, the Conservatives are set to plough on with their scrapping of Section 21 ‘no fault’ evictions that were started under Theresa May’s leadership.
Finally, despite the contraction of the construction sector in 2019, a Conservative government has promised an additional 1 million homes by the end of their tenure in 2025.
Brian Berry, Chief Executive of the FMB, said:
“The new Conservative Government has a golden opportunity to sort out Brexit and set out its new vision for the UK. Building the homes and infrastructure that this country needs has to be a key priority to help drive the economy forward.”
“The Government needs to back the nation’s army of small builders, by delivering on the promised £3bn National Skills Fund, investing in quality through a licensing scheme for the whole UK construction industry, and supporting local builders to retrofit the millions of homes that need to be upgraded to low carbon.”
John Phillips, National Operations Director at Just Mortgages, said:
“The political deadlock of the last few years has finally been broken. Whatever anybody may think of the result, we now have some clarity around Brexit at long last and that should help bring more certainty to people thinking about buying or selling homes, and to investors.
“The government has a majority now not just to ‘get Brexit done’, as we’ve been hearing during the election, but to get on with some of the other issues that have been holding the country back.
“There’s been plenty of talk from Boris’s camp – going back to his leadership campaign earlier in the year – about reforming the planning system, getting more houses built and lowering the burden of stamp duty on the higher-value end of the market. He now needs to make good on that talk.”
Guy Gittins, Managing Director, Chestertons, commented:
“If there’s one thing that slows the property market more than anything, its uncertainty and this morning, two big uncertainties have been removed: we will have a Conservative government for the next five years and we will be leaving the EU, with or without a deal.
“We more or less know what is in store with regard to policies affecting the housing market: it is unlikely that tax cuts on property will be high on the agenda for the immediate future given their proposed spending plans in other key areas such as health, education and policing, but the more extreme plans of the other political parties such as rent controls are no longer on the table.
“We expect that the considerable pent-up buyer demand which has been waiting for Brexit clarity will now be released. Sellers will in turn be encouraged by the increase in demand and are likely to start putting their properties on the market in greater numbers and the increase in sales could see prices bounce back quite quickly. We have already seen how quickly confidence can rebound with the pound surging to its highest level since June last year and the FTSE 250 hitting record highs, and buyers should consider acting sooner rather than later while prices are still at attractive levels compared the last market peak.”
Richard Lambert, CEO of the National Landlords Association:
“The Conservatives claim that the changes announced in the manifesto will ‘create a fairer rental market’, but fairer for whom? To say that we are disappointed that the Conservatives have pledged to continue with their plan to abolish Section 21 is an understatement. Despite a robust lobbying campaign on behalf of the two million landlords in the UK, the Conservatives seem hell-bent on continuing to punish hardworking and law-abiding landlords.
“We will reserve judgment on the so-called “lifetime deposit”. The Conservatives has yet to confirm what this will look like or how this will work in practice.
“The NLA cannot get behind a manifesto that so badly cripples landlords’ ability to run a functioning letting business.”
Are you excited by the prospective changes to the property sector under the new Conservative government? Will these pledges become reality in the short term? What issues may arise as a consequence of the policies?