What Does The Election Mean For Housing Market?

After much speculation, the date is finally set in stone and we’ll be going to the polls on Thursday 4th July, kicking off a little over a month of political campaigning.

Looking to get a mortgage sorted before potential big change? Get in touch – we can put you in touch with experts that can help you!

What does the upcoming election mean for the property industry? Will the Renters Reform Bill wither on the vine or will it FINALLY be pushed through? What about the policies from the two major parties?

The Renters (Reform) Bill

We’ve been talking about the Renters Reform Bill for YEARS at this point. The Bill was proposed by Theresa May and has seen four Prime Ministers and a global health crisis – and is now going toe to toe with a general election, just as it was entering its final phase.

And sadly, this is where the Renters (Reform) Bill finally loses its battle.

Ahead of the general election, there are decisions to be made about legislation which can be rushed through ahead of Parliament being prorogued. Unfortunately, the Commons Leader Penny Mordaunt did not include the Bill in this rush-through list.

So what does this mean for the reforms in the Bills? The long talked about ban of Section 21? The property ombudsman? The online property portal and changes to standard tenancies?

Well, all of that will be abandoned and whoever ends up in government will be going back to the drawing board. Labour’s Matthew Pennycook, who is the shadow housing minister and has been outspoken about the failings of the Bill said:

The Tories’ decision to cave in to vested interests and abandon the Renters Reform Bill leaves in tatters the promises they made to private tenants five years ago. Labour will pass renters reform legislation that levels decisively the playing field between landlords and tenants.

So that’s a pretty big promise from a Labour MP – if a little on the vague side. So what do the big two parties propose for the property industry? 

Labour’s Pledges

Labour have set out six key pledges for their time in government:

1. Deliver economic stability
2. Cut NHS waiting times
3. Launch a new Border Security Command
4. Set up Great British Energy
5. Crack down on antisocial behaviour
6. Recruit 6,500 new teachers

Hm, no mention of landlords, tenants or homeowners there… But don’t worry, if you dig a little deeper into these promises, that’s where you’ll find property.

As part of their pledge to ‘deliver economic stability’, Labour plan to build 1.5 million homes, with the biggest boost to affordable, social and council housing for a generation. They also plan to give mayors and combined authorities powers and flexibility to turbocharge local growth.

So how will this affect the property industry?

Well, so far the Tories have consistently failed in their pledge to build 300,000 new homes per year. In 2021, the Guardian reported that this goal was ‘almost impossible’, due to shortages of material and labour. 

Labour’s pledge, if they are able to carry it out, will boost the number of new homes, which is good news for the housing industry which is suffering from a supply issue. With a focus on affordable, social and council housing, we may even be able to stop talking about the impact that high and increasing rents are having on tenants.

Labour have also committed to building on brownfield land first, but has admitted that green belt land is required in order to build the homes that Britain needs. They aim to release greenbelt that is actually poor-quality land, car parks and wasteland – also known as ‘grey belt’

While the promise to give mayors and combined authorities ‘powers’ and flexibility to turbocharge local growth, doesn’t really sound like much of anything at the moment, this could have a big impact on local communities, if it means that more areas take on selective licensing. Watch this space to find out what that promise actually means in real terms.

Tory Promises

According to the Conservative website, they will be focusing their attention on:

1. Raising defence spending to 2.5% of GDP by 2030
2. Introducing National Service for 18-year-olds 
3. Seeing the Rwanda plan through 
4. Keeping inflation low
5. Long-term ambition to abolish National Insurance, an unfair double tax on work
6. First long-term workforce plan in NHS history, alongside NHS productivity reforms
7. Guaranteeing the pensions Triple Lock
8. Doubling free childcare

Like Labour, there’s no property focused headline pledge, and at the moment, the Tories are getting a lot more attention for their vow to reinstate National Service in an attempt to create a “renewed sense of pride in our country”. But some of these pledges will impact the property industry.

Keeping inflation low will eventually lead to the Bank of England lowering the base rate, which will have a positive impact on mortgages – so if you’re planning to buy or remortgage, that will be good news for you!

While the Tories have failed in their house building pledges, we do need to bear in mind that they were contending with the pandemic and cost changes due to Brexit. many landlords feel more secure under a Tory led government than they would under a Labour led one for a number of reasons including:

1. The Tories have rebuffed the idea of a rent freeze, whereas London Labour Mayor Sadiq Khan has called for one
2. Labour wants to give first time buyers ‘first dibs’ on property, something the Tories don’t intend to do
3. The Tories have scrapped plans to upgrade all rental properties to EPC band C, due to the current pressures on landlords and housing supply. 
4. The Tories reduced Capital Gains Tax from £12,300 to £6,000 from April 2023, whereas Labour’s Shadow Chancellor Rachel Reeve has said that “it would be best to tax people who get their incomes through stocks and shares and buy-to-let properties”.
5. Planning to abolish National Insurance in the long term will also be good news for landlords who feel their tax burden is too onerous

Current Prime Minister Rishi Sunak has mentioned that he is considering reinstating Help to Buy, to get more first time buyers on the property ladder. Previous PM Boris Johnson had committed to extending Right to Buy, but this has yet to come into effect, though it could be something we see happening if the Tories win the July election. 

Both the Labour Party and the Conservatives want to crack down on second homes and holiday lets and overthrow the current leasehold laws, so while plenty of their policies are in opposition, there are a few key points they do agree on. So whoever wins the election in July, we are likely to see significant changes in leasehold laws and holiday lets.

Who gets your vote and why? 

Let us know in the comments below, we’d love to hear your stories and feedback. 

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