What they’ve pledged
The Conservatives announced plans to build 200,000 starter homes for first-time buyers and extend the controversial Right to Buy scheme for up to 1.3m tenants of housing associations in England, along with the creation of a £1bn brownfield regeneration fund.
Labour also committed to building 200,000 homes a year by 2020 along with creating a ‘future homes fund’, using money saved in Help to Buy Isas to boost housing supply. For private renters, it will make three-year tenancies the norm and cap rent rises to inflation plus 1 per cent.
The Liberal Democrats aimed to build 300,000 homes a year, including in 10 new ‘garden cities’. They also promised new ‘rent to own’ homes where monthly payments steadily buy a stake in the property, along with a ‘help to rent’ tenancy deposit loan to help young people.
The Greens promised to give the Bank of England the powers it has requested to curb excesses in the housing market, which is currently under consultation. It would also scrap the government’s Help to Buy scheme and committed to building 500,000 new social rental homes.
Ukip said it would take steps to remove the barriers to brownfield builds to help build 1m homes on such sites by 2025, whilst also exempting them from stamp duty on first sale, up to the £250,000 threshold. Non-British nationals would be denied access to Right to Buy or Help to Buy.
Expert reaction
Nigel Stockton, financial services director at Countrywide.
The estate agency group welcomed every party’s initiatives to address the supply and demand for housing, noting a change in emphasis and a tacit acknowledgment that the private rented sector is here to stay.
“What is not in doubt is that housing cost, whether purchased or rented, is at the heart of the discussions and a real live political issue.
“In the [private rented sector] debate there are two main arguments, one by the Conservatives that the market is mainly working well and they can crack down on rogue landlords through current legislation without the need for specific remedies, while for Labour there are proposed rent caps and fee transparency measures,” stated Mr Stockton.
“The Liberal Democrats see tenancy deposit assistance as the way to get young people into rental properties, however the Greens and Labour both propose that legislative intervention is needed to make the rented market work better in the future than today.”
He added that the mortgage industry have been saying for some time that housing is too important to leave to chance.
“For the first time for a long time, there is a real sense that whichever party is successful on 7 May, all parties will look to increase housing supply and provide incentives to assist those moving or renting.”
Richard Sexton, director of E.surv Chartered Surveyors
The online survey tool provider agreed that all parties addressed homebuilding in one form or another, but Mr Sexton added that the realities of mortgage lending are conspicuously absent.
“It’s like building cars without providing petrol – if people can’t get the mortgages, the property won’t shift.”
E.Surv’s research has previously demonstrated this link between the availability of mortgages and the owning of homes, something especially true for first-time buyers with smaller deposits.
“To a large extent, responsibility over mortgage lending has been ‘outsourced’ by politicians,” he commented, suggesting that it now rests at the door of the Bank of England’s Monetary Policy Committee.
Last year, the Treasury unveiled a consultation, proposing that the Bank’s own financial policy committee should be allowed to make macro-prudential decisions and implement them to protect the housing market and wider economy.
Currently, the BOE can merely make a recommendation to impose limits; only the PRA and the FCA can carry this out.
Mr Sexton added: “Of course it’s right that unwieldy mortgages be curtailed, but the market needs to be supported just as it must be guided; that’s why it’s encouraging to see cross-party support for ideas like Help to Buy. Mortgages matter – and they need far more attention in the general election campaign so far.”
Guy Meacock, diretor of Prime Purchase.
Labour’s threat to abolish non-dom status is already being discussed and causing people to hold fire, whether buying or selling, according to the head of the London office of the buying agency.
As for their mansion tax plans, the impact will be more limited than many people think, but again it is already causing problems and uncertainty in the market, according to Mr Meacock, who also criticised Labour’s 50 per cent tax proposal.
Meanwhile, in terms of the other main parties, he commented that if the Tories get in, many of his clients believe that prices will rise as confidence returns.
“The Tories’ big policy change with regard to housing has already happened - the changes to stamp duty - which have had a huge impact on the market, and are a far bigger deal than stamp duty.
“The Lib Dems no longer seem as committed to a mansion tax, stating that they will stagger its introduction to soften the blow and reduce the chance of alienating voters in the south.”
peter.walker@ft.com
