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General Election June 2017

5 Jun 2017
General Election June 2017

What does this mean for the property market?

Theresa May called a snap general election for the 8th June 2017. Clearly, a main battle ground will be the leadership of the UK thorough the Brexit negotiation process, however, domestic policies will also be at the forefront of voters minds come June 8th.  With this in mind we have compiled an overview of the main parties manifesto pledges in relation to the housing market.

The Conservative manifesto pledges to:

  • Look at how to increase security for good tenants and encourage landlords to offer longer tenancies as standard.
  • Strengthen the enforcement of equalities law – so that landlords and businesses who deny people a service on the basis of ethnicity, religion or gender are investigated and prosecuted.
  • Halve rough sleeping over the course of the parliament and eliminate it altogether by 2027.
  • Reform and modernise the home-buying process so it is more efficient and less costly.
  • Crack down on unfair practices in leasehold, such as escalating ground rents.
  • Meet the 2015 commitment to deliver a million homes by the end of 2020, delivering half a million more by the end of 2022.
  • Deliver the reforms proposed in the Housing White Paper.
  • Build high-quality, high-density housing like mansion blocks, mews houses and terraced streets – and pledges that government would build 160,000 houses on its own land.
  • Support specialist housing where it is needed, like multi-generational homes and housing for older people, including helping housing associations increase their specialist housing stock.
  • Work with private and public sector house builders to capture the increase in land value created when they build to reinvest in local infrastructure, essential services and further housing.

The Labour manifesto pledges to:

  • Make three year tenancies in the private rented sector standard across the sector, with rent caps linked to inflation.
  • Give the Mayor of London new powers to provide additional security for tenants in the capital given the unique pressures tenants here face.
  • Legislate to ban letting agency fees for tenants.
  • Introduce new legal minimum standards to ensure private rented homes are fit for human habitation with new measures to empower tenants to take action where their properties are not up to scratch, empowering tenants to call time on bad landlords by giving renters new consumer rights.
  • Scrap the so called ‘bedroom tax’.
  • Reverse the decision to cut housing benefit payments for those aged 18 to 21.
  • Establish a new Department for Housing.
  • Insulate more homes with a consultation also on preventing ‘rabbit hutch’ homes.
  • Implement new minimum space standards for new housing developments.
  • Draft a new national plan to address the problem of homelessness.

The LibDem manifesto pledges to:

  • Reverse housing benefit cuts for 18-21 year olds.
  • Increase Local Housing Allowance (LHA) in line with average rents in an area.
  • Scrap the so-called ‘bedroom tax’ and incentivise local authorities to help tenants downsize.
  • Directly build 300,000 homes a year, through a government commissioning programme to build homes for sale and rent.
  • Set up a new government-backed British Housing and Infrastructure Development Bank with a remit including providing long-term capital for major new settlements and helping attract finance for major housebuilding projects.
  • End the Voluntary Right to Buy pilots that sell off housing association homes
  • Lift the borrowing cap on local authorities and increase the borrowing capacity of housing associations so that they can build council and social housing.
  • Scrap exemptions on smaller housing development schemes from their obligation to provide affordable homes
  • Require local plans to take into account at least 15 years of future housing need.
  • Enable local authorities to:
    • Levy up to 200% council tax on second homes and ‘buy to leave empty investments from overseas.
    •  Enforce housebuilding on unwanted public sector land.
    • Penalise excessive land-banking when builders with planning permission haven’t built after three years.
    • End Right to Buy

In a bid to help those struggling to raise a deposit for their own home they will;

  • Help people who cannot afford a deposit by introducing a new Rent to Own model where rent payments give tenants an increasing stake in the property, owning it outright after 30 years.
  • Ban lettings fees for tenants, capping upfront deposits and increasing minimum standards in rented homes.
  • Help young people into the rental market by establishing a new Help to Rent scheme to provide government-backed tenancy deposit loans for all first-time renters under 30.
  • Give tenants first refusal to buy the home they are renting from a landlord who decides to sell during the tenancy at the market rate according to an independent valuation.
  • Promote longer tenancies of three years or more with an inflation-linked annual rent increase built in, to give tenants security and limit rent hikes.

It is worth remembering that the 2015 Green Party manifesto was the only one calling for a restriction in landlords’ mortgage interest relief – a policy which went onto being brought into force by the then Chancellor, George Osborne. On this basis, it is always important to understand what the smaller parties are saying.  History has shown us that popular policies are often renamed and churned out by opposition parties if they look like vote winners.

The Green Party Manifesto pledges to:

  • Reinstate housing benefit for under-21s, stop Local Authorities declaring young people “intentionally homeless”, and invest in community house-building projects to provide affordable, secure housing options for young people.
  • Introduce a “living rent” for all through rent controls and more secure tenancies for private renters.
  • Ban letting fees.
  • Introduce mandatory licensing for all landlords.
  • Support the development of a renters’ union.
  • Roll out a major programme to build affordable, zero carbon homes, including 100,000 social rented homes each year by 2022.
  • End the Right to Buy.
  • Abolish the so called “bedroom tax.”
  • Take action to bring empty homes into use and trial a new Land Value Tax.
  • Help first-time buyers by aiming for house price stability – getting rid of buy-to-let ‘tax breaks’