UK: Housing: Where do the Main Political Parties Stand?

Last Updated: 30 April 2010
Article by Karin Holt

With the general election only a matter of days away, this briefing looks at what the three main political parties have proposed for the housing sector in their recent policy statements and election manifestos. We discuss some of the main proposals below and assess the possible implications their proposals may have on the sector.

Labour

  • Build up to 10,000 new council homes a year by 2014/15;
  • Maintain the HomeBuy Direct scheme;
  • Maintain the stamp duty threshold at £125,000, but (1) abolish it for people in home ownership schemes, and (2) scrap it for two years for first-time buyers on homes worth up to £250,000;
  • Ensure that all new homes will be zero carbon by 2016;
  • Maintain Home Information Packs;
  • Maintain the standard interest rate on the Support for Mortgage Interest Scheme at 6.08 per cent until December 2010;
  • Give more powers to local authorities to manage the developments of houses in multiple occupation (HMOs), particularly where HMOs affect the composition of local communities;
  • Crack down on social housing tenants who fraudulently sub-let their properties;
  • Develop a new form of affordable housing for families on modest incomes who don't qualify for social housing (e.g. allow them to rent an affordable home at below market rates while they build up an equity stake);
  • Give tenants who rent from a private landlord the right to a written tenancy agreement;
  • Establish a new National Landlord Register.

Conservatives

  • Scrap national and regional housebuilding targets, but reward those local authorities who build more homes by allowing them to keep more of the proceeds from council tax and business rates;
  • Create Local Housing Trusts to develop homes for local people (if there is strong community backing for this);
  • Expand the self-build sector, particularly in rural areas – local authorities will have to set up a register of families who want to join a self-build scheme and then assess how much land needs to be put aside for a self-build community to be set up.
  • Allow neighbourhoods to stop the practice of 'garden grabbing';
  • Permanently scrap stamp duty for first-time buyers on homes up to £250,000;
  • Abolish Home Information Packs;
  • Give social tenants with five years good behaviour a 10 per cent equity stake in their properties;
  • Pilot a new 'right to move' scheme and introduce a nationwide social home swap programme, so social tenants can transfer their tenancy to another home in any part of the country;
  • Introduce a new 'open source' planning system, so that local people can specify what kind of development they want to see in their area;
  • Force developers to pay a tariff to local authorities as compensation for the loss of any amenities and costs of additional infrastructure;
  • Abolish the power of planning inspectors to rewrite local plans;
  • Amend the 'Use Classes Order', so that people can use buildings for any purpose allowed in the local plan;
  • Limit appeals against local planning decisions to cases that involve abuse of process or failure to apply the local plan.

Liberal Democrats

  • Scrap regional housebuilding targets and allow local authorities to determine how many and what type of homes are needed in their area;
  • Bring 250,000 empty homes back into use by offering grants and cheap loans to their owners to renovate them – grants if the home is for social housing, loans if the home is for private use;
  • Build tens of thousands of affordable houses to rent;
  • Ensure council houses sold under the 'Right to Buy' scheme are replaced;
  • Allow local authorities to keep 100 per cent of the capital receipts from 'Right to Buy' sales;
  • Create a new 'Safe Start' mortgage that protect buyers from negative equity;
  • "Scale back" Homebuy Direct schemes;
  • Offer "green loans" for people to invest in home energy efficiency and micro-renewables;
  • Scrap Home Information Packs, but retain energy performance certificates;
  • Create a third-party right of appeal in cases where planning decisions go against locally agreed plans;
  • Stop major new housing developments in major flood risk areas;
  • Promote schemes for affordable homes, such as equity mortgages and 'Home on the Farm' which encourage farmers to convert existing buildings into affordable housing;
  • introduce a new planning 'use class' for second homes, so that communities and local authorities can control the number of homes given over to holidaymakers.

Comment

The Home Information Packs (HIPs) have not been particularly popular with sellers, estate agents, developers or conveyancers, and there is a general feeling that they have not actually achieved what they were introduced to do, which was to speed up the process of buying and selling properties, although the HIP industry comments that they believe it has. The Conservatives say that they will abolish them, but the shadow housing minister Grant Shapps has not said what he will replace them with. The Liberal Democrats are saying that they will abolish them but retain the Energy Performance Certificates (EPCs). There is obviously concern in the HIP industry as to how this will affect them and they are urging the new government to adapt not scrap HIPs. Thousands of people trained to be Energy Assessors and the HIP industry employs a lot of people.

Apparently sellers are also delaying putting their properties on the market until after the election to see what actually happens. However, whichever party or parties do take over, the decision will not be an instant one, so are sellers going to carry on waiting indefinitely? I am sure we all want to see an upturn rather than a stall in the housing market.

The Labour government's first-time buyer relief on properties up to £250,000 for two years is good news for first-time buyers, but is difficult for conveyancers to "police". Clients could tell us that they are first-time buyers when they have actually owned a property previously anywhere in the world, and we have no way of checking and have to rely on their honesty. The Conservatives say that they will permanently scrap this for first-time buyers, which will presumably not encourage first-time buyers to get on the property ladder as soon as possible, thereby assisting the market to pick up after the recent slump.

The HomeBuy Direct schemes have been extremely popular in the recession, which Labour want to encourage, but the Liberal Democrats want to "scale back", although they have other schemes in mind.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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