Who will be investing in the property sector?

Who will be investing in the property sector?

This year is set to bring about many changes and the plans in place for the property market under the coalition may be eradicated; depending on which political party gains power come May. Who will invite the greatest boost for the conveyancing sector and who is set to encourage crucial first time buying?

It’s clear the housing shortage within the UK is continuing to be heavily debated amongst the opposing parties. Arguments over the volume required and the time scale allocated are a hot topic – with some focussing on sheer numbers, while others focus on support of developers, first time buyers and local councils.

The Coalition

Within the last 12 months, it’s been reported that housing supply and the number of first time buyers are the highest levels since 2007. According to reported figures, over 240,000 homes were granted planning permission last year and 326,000 people were able to step onto the property ladder for the first time. 2014 is also said to have seen the completion of 114,440 new residential properties within the first 6 months alone.

Since coming into power, the current government has introduced a number of schemes and initiatives to support the property market. Conveyancers have witnessed the benefits of increased transaction levels, with home movers being offered reduced mortgage rates and the opportunity to move smoothly from renting to purchasing.

Convervatives

On 15th December, the Government commenced the Starter Home initiative, which is said to be around 6 months ahead of the expected launch. This has been a driving force from the Conservatives, since announcements in September, as a way to uphold their support for younger people.

As part of the new scheme, 100,000 homes will be built over the next 5 years and will only be offered to first time buyers under the age of 40.

Will this finally be what is needed to see this generation become home owners – or is more needed to counteract the rising cost of living and encourage savings for property investment?

The Starter Home Initiative will see changes within the planning system, encouraging property builders to utilise brownfield land across the country, leading to reductions on overall development costs. This will mean homes can be offered to applicable first time buyers at a discount of at least 20% – encouraging young people to take a step onto the property ladder and gain financial security within their own home.

Under current legislation within section 106 of the Town and Country Planning Act 1990, home builders can expect to pay around £15,000 per property, for affordable housing. Within the new scheme, these charges are no longer applicable.

Along with local councils, the nation’s leading property developers are setting in place plans to start building the housing. Conveyancers should prepare and aim to support first time buyers to make the right purchasing decision for them.

Is this a worthwhile addition to the property market and will more young people be encouraged to move away from renting as a result?

Labour

The main plans in place for home buyers under the Labour Party include building an additional 200,000 homes by 2020 and give first time buyers within surrounding areas greatest priority.

Labour have claimed they are the only political party who are committed to building the volume of housing that aspiring buyers truly need. Their aim is to double the amount of first time buyers over the next 10 years.

Proposals put forward seem to be favouring communities, rather than giving power to the leading developers, as the current government are doing. Labour are looking to allow residents within the local area decide where homes are needed, and supporting councils by allocating Housing Growth Areas for which to produce sufficient building plans.

Ed Miliband has stated that new developments are currently bought before people from the local area can show interest or reap the benefits in any way. He says first time buyers within communities will get a fairer chance to take up any new homes, which will work in favour of the local residents.

Miliband has also proposed that local councils will be able to apply restrictions on any new developments. A certain percentage can be retained for the local residents and Buy To Let investments will face limitations.

Do you think this proposal will work negatively against the rental trend already established – or will this drive consumers to pump much needed investment into the local economy?

Continuing the support of local people, Sir Michael Lyons has said Labour will be aiming to support small building companies, which should lead to the addition of hundreds of thousands of jobs. Is boosting housing supply alongside reducing unemployment levels within communities an intrinsic strategy for encouraging first time buyers?

Liberal Democrats

Throughout reporting over recent months, it is clear that the Liberal Democrats are heavily focussed on having a fairer (or at least introduce new) strategies into the property taxation system.

The reform of the stamp duty system has been one of the main standpoints for the Liberal Democrats, which was finally announced in the Autumn Statement in December. Nick Clegg has also previously supported the mansion tax proposals. However, this has now been scrapped by the party; they are in favour of having a shake-up of the council tax bands.

Though this reformation is due to only affect properties in the higher bands, will this have an overall effect on transaction levels? Will this benefit conveyancing through attracting greater uptake of higher value properties in the lower end of the current Band H?

With regards to the housing supply, the Liberal Democrat President, Tim Farron, says 300,000 new homes a year is a more realistic scale of what is required to relieve the housing shortage.

Business Secretary, Vince Cable has said the current Help to Buy scheme limits affordability. Giving greater power to social housing authorities should allow them to have flexibility over the rental pricing as well as implementing changes to restrictions on fuel charges. Will this proposal offer a more bespoke affordable housing market regionally, or do the national schemes allow for a fairer system?

Georgia Owen

Georgia is the Content Executive and will be your primary contact when submitting your latest news. While studying for an LLB at the University of Liverpool, Georgia gained experience working within retail, as well as social media management. She later went on to work for a local newspaper, before starting at Today’s Conveyancer.

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