The General Election and what it means for the property market

Posted on 27th April 2015

House Prices

The UK’s largest independent estate agent, Haart, have recently come out to say that homebuyers should consider purchasing their property before the 7^th May as house prices are likely to rise after the election. The 0.9% increase in March 2015 is a good indicator of this, they have argued.

Housing Crisis

Everybody is aware that there is a severe shortage of houses in the UK and each party has put forward their proposals. By 2020, the Conservatives have promised to build 200,000 starter homes for first-time buyers, more garden cities and a further 400,000 new units from brownfield land. Labour is also offering garden cities, and has pledged to build 200,000 homes a year. The Liberal Democrats want 300,000 new homes a year, in at least 10 garden cities, while UKIP is proposing a £1 billion brownfield site revolution.

 

Right to Buy

The Conservatives have recently announced that they will extend Margaret Thatcher’s famous Right to Buy policy and allow 1.3 million council tenants to buy their council homes at a heavily discounted price. The proposed discount will be worth 35% for a house after a housing association tenant has been in the house for three years with the value of the discount rising 1% for every extra year the tenant has rented in the public sector. In the case of a flat, the discount will be worth 50% after the first three years, rising by 2% each year afterwards.

Rent to Own

The Liberal Democrats have introduced a new ‘Rent to Own’ policy with the aim of long-term tenants being able to build up a share in their property through renting and crucially without the need for a deposit. Building 30,000 rent-to-own starter homes will make up part of their wider housing policy.

 

Help to Buy

The Conservatives are pledging to extend their Help to Buy scheme to get more first time buyers on the housing ladder. This includes introducing a new ISA whereby the government will contribute £50 for every £200 that aspiring homeowners save up towards a deposit for their first home.

The move will mean that someone saving up a ten per cent deposit on the average first-time buyer property valued at £150,000 will now have to save £12,000 and the government will chip in £3,000 more. The tax break will be capped at £3,000.

Admin Fees

A key pledge of Labour would be to scrap administration fees for Letting Agents, as well as introducing default three-year tenancies and introduce ‘rent ceilings’ whereby excessive rent increases would be made illegal.