Election promises and property
In this article, I look at what the main political parties are likely to do for residential property, should they be elected with enough of a majority to actually do anything.
Let’s start with the Conservatives.
Conservative’s Property Plans
Well, landlords have hardly had it easy from the Tories over the years since when George Osborne became chancellor and ever since. There has been a number of different tax increases and tougher lending rules has made it harder for landlords to borrow to buy property.
However, Boris Johnson has said he would look into scrapping stamp duty land tax for homes under £500,000, but its not clear if that scrapping would also apply to the extra 3 per cent stamp duty that landlords have to pay on all residential property purchases. I suspect not.
Getting rid of any SDLT would increase housing transactions, especially in those regions where house prices are highest – London and the south east of England.
The Tories have also said they may extend Help to Buy, which many have dubbed “Help to Buy House-builder Director’s Yachts” or “the crack cocaine of the housing market”. (The main beneficiaries have been the big house-builders and it’s proved hard to withdraw from without significantly cooling the housing market, already in a moribund state due to Brexit uncertainty).
Labour’s Property Plans
With Labour, private tenants could get a right to buy the homes they live in at some level of discount, (yet to be determined), under plans already floated by the Shadow Chancellor. Seizing private property is pretty radical and really shows the Marxist leanings of the current Labour party. They also plan to cap rent rises at the rate of inflation.
There’s not much detail in the proposals from Labour, but seizing private property with or without full compensation at market price would likely run into legal challenges.
Under Labour’s “Land for the Many” paper which is backed by Corbyn, but not yet official policy, stamp duty could be abolished on main residences but there would be an increase in capital gains tax on second homes and let properties. Council tax could be abolished and replaced with a tax based on house prices. Alongside this idea, there could be a publicly backed trust that would buy the land on which homes sit. Buyers would buy the home only and pay land rent to the trust. Pretty radical and according to many experts, pretty expensive.
Liberal Democrats Property Plans
Like Labour, the Lib Dems are keen on abolishing Section 21. The Tories were too, though this measure did not make it into Boris’s Queen’s speech.
The Lib Dems have dumped the annual “mansion tax” on properties worth over £2million but still plan for much higher rates of council tax on expensive properties.
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