Is a Tory win a victory for the housing market?
With the smoke clearing from the blood, sweat and non-Tory tears of the election, it is time to assess whether or not the Conservative’s victory will also be a win for the UK housing market.
Throughout the election campaign, the subject of housing and in particular the private rental sector, was a key area of debate. Many experts have pointed to this as a pivotal point that contributed to seal the downfall of the Labour party.
Milliband Mishaps
Critics have argued that the inclusion of housing policies in his election manifesto went a long way to causing Ed Milliband’s rather large defeat. It can be argued that his policies alienated landlords, letting agents and buyers alike.
One of the main gripes of Mr Milliband’s proposals was the much-maligned ‘Mansion Tax,’ which discouraged wealthy property owners and potential, many foreign investors in equal measure. Proving to be just as harmful were plans for rent capping and minimum term three-year tenancy agreements, not to mention the abolition of the ‘non-dom’ tax status, which aimed to prevent tax limitations on the earnings of wealthy people gained outside of the UK.
As such, David Cameron was able to gain the bulk of the support from people inside the property market without breaking much of a sweat. However, with the housing market showing increased property prices, spiralling rents and a chronic lack of supply, particularly for the younger generation, is a Tory government going to stand up and confront the problems head on?
Is a Tory win a victory for the housing market?
Encouraged
The bones are still being picked out of the election campaign, but it seems certain that with all the chaos of the last few months in the past, investors, landlords and agents will be encouraged to press ahead with plans, which should give the market a shot in the arm. That said, despite a Tory majority result, all political parties never addressed the real problems facing the private rental sector. More regulation of letting agents and additional incentives for landlords to make the necessary improvements to their portfolios remain important factors to be confronted.
Pleasingly, there are already plans afoot to change Section 21 (A and B) of the Housing Act. Brian Murphy, head of lending at Mortgage Advice Bureau said, ‘the changes proposed to Section 21 of the Housing Act will make it more straightforward to evict a tenant, albeit placing some restrictions on how and when a Section 21 can be given. However, landlords must ensure that they don’t carry out their own eviction in a way that is actually illegal.’ [1]
Building blocks
One theme that all of the political parties agreed on was the fact that there is a substantial lack of affordable housing and that current measures are not enough. Homes need to be built, especially with the UK population expected to rise substantially once again during the next ten years.
The Conservatives have announced that their Right to Buy scheme will be extended to tenants in housing association properties, which could apply to 1.3 million families. A new Help to Buy ISA has also been promised, planned on assisting first-time buyers take their baby steps on the property ladder.
However, the fact remains that even if first-time buyers are given all the help in the world, they will still require a property in which to live. If a sufficient number of homes are not built to cope with demand, the UK faces an entire population being unable to afford their own property. It can be argued that how the Conservative government go about tackling this issue will go a long way in defining their term in office at Number 10.
[1] http://www.propertyreporter.co.uk/hero/is-a-tory-win-a-landlord-win.html?utm_source=Sign-Up.to&utm_medium=email&utm_campaign=21136-105386-Campaign+-+11%2F05%2F2015+Shaw#.VVCUME94dtU.twitter