Political parties outline their General Election housing plans
With the General Election set to grip the news headlines for the next few months, what do the two main parties have in store for the housing market if they get in to power come 7th May?
Home ownership came into the mainstream in the 1980s with Margaret Thatcher’s Right to Buy scheme, with ownership peaking at just under 70% in 2001/2002. Since then, home ownership has dropped everywhere, with the steepest falls in London and the surrounding areas. At the same time, the age of the first time buyer and the loan to earnings ratio has increased.
So how exactly do the main political parties plan to address the housing market if they move in to Number 10?
The Conservatives have pledged that first-time buyers in England under the age of 40 could buy a house at 20% below the market rate. They have pledged to build 100,000 new homes for such people on brownfield land already identified for development and exempt from some taxes.
They say the savings from using such land would be passed on to the buyers. They will encourage new approaches including part rent/part buy schemes, and align taxation policies with pro-ownership planning policy by using higher taxes on professional property investment to pay for the progressive phasing out of stamp duty.
By contrast, the Labour Party has plans to create 200,000 new homes a year by 2020 and give councils powers to set by a proportion for first-time buyers. They have promised to increase supply by creating Housing Growth Areas for new home building, where councils can reserve up to half of the housing stock for two months for first-time buyers. They would also be able to restrict sales to buy-to-let investors or speculators who leave homes empty while they accrue value.
Who’s right? Who’s wrong? One thing is certain; the UK has one of the most dysfunctional housing markets in the developed world, so finding a workable solution will be a considerable challenge for whichever party or indeed coalition comes to power. Political commentators are forecasting the most unpredictable election in recent memory. We’ll all have to wait and see if they’re right.