Housing is one of the biggest issues facing the UK, but in London, it’s the biggest issue bar none. Record high housing demand and an under supply of homes has delivered a new, all time high in the price of property coming to market. In the Capital alone, house prices have increased by 50% (or £195,420) since the last election in 2010, so the policies surrounding London’s ‘housing crisis’ will be a fundamental driver in helping the public decide what party they will vote for at the General Election in exactly two weeks’ time.
We’ve therefore taken a look at the main housing pledges that are shaping the election trails of the six largest parties in the UK.
David Cameron is proposing to refuel the right-to-buy scheme, extending the scheme to apply to 1.3 million housing association tenants – this would give council tenants a chance to purchase their homes at a discount estimated to be up to 30% less than market value.
The party also plans to build 200,000 new homes for first time buyers by 2020. This would accompany a new scheme that cuts 20% off the market price of starter homes for such buyers under the age of 40.
Current policies recently implemented by the Conservative party include a raft of new changes to the structure of Stamp Duty Land Tax (SDLT), announced in the Autumn Statement. And last month, they announced the help-to-buy ISA, whereby first time buyers that choose to save through this scheme will receive a government bonus that represents 25% of the amount saved. There is however a maximum monthly saving of £200 – meaning that the government will contribute £50 – with a maximum government contribution of £3,000 on £12,000 worth of savings.
The most contentious housing policy by the Labour party is the proposed Mansion Tax on high value properties (worth over £2 million). It is expected that for properties worth between £2 million and £3 million, a monthly tax of £250 will be charged, or the equivalent of £3,000 a year. Those who live in high value homes, yet earn under £42,000 a year, will have the right to defer payment until their property is sold.
Ed Miliband proposes that 200,000 new homes will be built a year by 2020; and that Labour will dissolve the ‘bedroom tax’ implemented by the Conservative party.
Rental reform is also high on the agenda for Labour. The party wants to make three year tenancy terms the ‘standard’, rather than the more common six or 12 months Assured Shorthold Tenancy agreements. They also want to ban letting agents from charging fees to tenants, as well as cap annual rent increases.
The Liberal Democrats are proposing to oversee the construction of 300,000 new build homes a year, which will include ten new garden cities.
Helping first time buyers is also high on the agenda – Nick Clegg wants to introduce a ‘rent-to-own’ scheme, whereby people could make monthly payments on one of 30,000 proposed properties in order to build up a 'share' in the home. No deposit would be necessary, and they would eventually own it outright after 30 years. They could cash in their share at any point in order to fund a larger deposit to buy a different home.
The party also proposes to launch a help-to-rent policy, which would provide young people living at home with a loan to help pay for a deposit on a rented home of their own. Tenants would be able to borrow up to £1,500, rising to £2,000 in London. The deposit would have to be paid back within two years.
UKIP has proposed that houses built on brownfield sites would be exempt from Stamp Duty for the first £250,000 on their first sale, and that grants would be made available to developers to encourage them to redevelop these sites.
Nigel Farage also wants to abolish the Conservative party’s ‘bedroom tax’.
The Green Party
The Green Party wants to ensure development is evenly distributed across the whole of the UK and make buy-to-let investments less attractive by removing tax incentives, including the deduction of mortgage interest as an expense.
Natalie Bennett wants 500,000 social homes built for rent – the party would also bring empty homes back into use to ensure everyone has access to an affordable place to live.
Stamp Duty Land Tax would be phased out and replaced with a Land Value Tax that would also eventually incorporate Council Tax – this, however, wouldn’t be until the final year of the next Parliament.
In terms of renting, they are proposing a five year fixed tenancy agreement, caps on annual rent increases and would prevent letting agents from charging tenant fees. They would also scrap help-to-buy, claiming that it doesn't help those in the greatest need.
The Green Party would also abolish the 'bedroom tax'.