Housing diversity: the policy proposals and the constituencies!
Published: 2 April 2015 | Author: Bernard Clarke
Five weeks from today, voters will go to the polls to determine the outcome of what appears to be one of the most unpredictable elections in UK history. It is, however, one in which housing looks certain to be a key issue. Today, we therefore look at what each of the main parties in the forthcoming election has said so far about housing policy, and the measures they would like to implement if they have a role in a future government.
We are still at an early stage in the formal campaign and so far the only party to have published its manifesto is Plaid Cymru. But over recent months each of the other parties has put forward a range of housing policy proposals. Each of the parties has already made a series of pronouncements affecting owner-occupation, the private rented sector and affordable housing.
In the last issue of this newsletter, we reviewed some of the key policy issues that could affect future lender funding of affordable housing, and today we look at their proposals across a range of different tenures.
Although a good deal of what has been said by the parties seeks to address the perceived problems of the UK housing market, we believe that the notion of a national housing market is essentially a myth.
In reality, the "UK housing market" is made up of a series of inter-related and overlapping regional and local markets – for owner-occupied, rental and affordable housing. Market conditions are shaped by local supply and demand, as well as by policies determined by the UK and devolved governments, and local authorities.
To illustrate the diversity of the UK market, we are today publishing some key facts and figures about local market conditions in the constituencies in which the main party leaders is seeking election. For those parties with leaders not seeking election to the UK parliament, we have – for illustrative purposes – selected constituencies with which they are closely associated.
Coincidentally, the party leaders are associated with a diverse range of constituencies, which serves to illustrate some of the significant differences in housing market conditions in different parts of the UK. The constituencies encompass central London, affluent and not-so affluent parts of southern England, contrasting urban locations in south Yorkshire, as well as parts of Glasgow, Cardiff and Belfast.
The average house price in our featured constituencies ranges from £132,000 in Doncaster North to £986,000 in Holborn and St Pancras. Local rental costs for a two-bedroom property vary between £450 and £1,885 a month, and levels of owner-occupation extend from 27% of the population in Holborn and St Pancras to 77% in Hallam in Sheffield.
The Conservative’s proposals
- Like most of the other parties, they want to increase housing supply. Would like to see the annual construction rate to rise to 200,000 homes by 2017, and the construction of 200,000 starter properties for sale to first-time buyers aged under 40 at 20% below market rate.
- Keen to realise the potential of alternative methods of construction and off-site manufacture to increase housing supply and reduce costs, and to create more opportunities for people to custom-build their own homes.
- Wants to extend the Help to Buy equity loan scheme for newly-built properties until 2020, introduce the proposed Help to Buy ISA, and a Rent to Buy scheme offering discounted rents and an opportunity to buy for social tenants. Would like to continue support for the Right to Buy scheme, and make it easier to sell on properties in shared ownership.
The Labour Party
- Has identified housing as one of six goals in its 10-year plan. Wants to build at least 200,000 homes annually and see the number of first-time buyers double by 2020. Would like to increase competition in the construction sector, and encourage the expansion of smaller building firms.
- Believes local authorities should have a mandatory local plan to meet housing need, with new powers to build on designated land quickly, to charge developers for not building when planning permission has been granted, and to designate new housing growth areas. Also wants incentives to deliver new garden cities, and to fast-track planning on small sites.
- Wants to devolve £6 billion a year in housing, infrastructure and transport funding to local authorities. Also proposing powers to give priority access to local buyers, and to prevent homes being sold for buy-to-let, or being left empty.
- Plans to introduce a "mansion tax" on properties worth more than £2 million, and to re-instate the spare room subsidy.
- Supports the simplification of financial products, with lenders required to send annual updates explaining how borrowers’ payments will change if interest rates rise, and favours a free financial guidance service.
- Wants “ring-fencing” of high street and investment banking, and possibly full separation of these two operations.
- Wants to introduce three-year tenancy agreements in the private rented sector, with restrictions on rental charges and reviews, and on letting agents’ fees. Would like privately rented properties to meet a decency standard by 2027.
The Liberal Democrats
- Would like to raise the annual construction rate to 300,000 homes, with a ministerial task force setting out in the first year of a new parliament how this will be achieved. Wants to introduce higher council tax bands for higher value properties. Favours the release of public land through ‘build now, pay later’ deals, and prefers ‘help to build’ over Help to Buy.
- Address restrictions caused by land-banking through a competition review of the building sector, plus community land auctions and ‘use it or lose it’ planning consents. Supports the introduction of powers to control the number of second and empty homes.
- Favours greater local autonomy through ‘devolution on demand,’ and grassroots support for local plans setting out housing need. Would like local authorities to have power to suspend the Right to Buy, but wants to introduce a new ‘rent to own’ scheme, under which tenants can become full owners without taking out a mortgage.
- Improved protection from rogue landlords in the private rented sector, plus the introduction of ‘family friendly’ tenancies and minimum energy performance standards for rented properties.
- Supports pension reform and the provision of free financial guidance, with the possibility to expand the scope of this further. Also wants ring-fencing of banks, perhaps with full separation of retail and investment banking operations.
The United Kingdom Independence Party
- Wants to protect the green belt, but make it easier to build on brownfield sites. Government to list nationally available sites for development, and to issue low-interest bonds to fund land decontamination. Exemption from stamp duty for the initial sale of newly-built homes on brownfield sites, as well as incentives through VAT. Stronger powers for local people to overturn proposals for large-scale development.
- Change the points system in the social housing sector to prioritise ex-servicemen and women. Restrictions on Right to Buy for foreign nationals, unless they have served in the armed forces.
- Wants to re-instate the spare room subsidy, but supports a streamlined welfare system and benefits cap.
The Green Party
- Abolition of the Right to Buy, and the construction of 500,000 new social rented homes by 2020. Powers to bring empty homes back into use and convert empty municipal buildings, where appropriate. Councils to be able to borrow money to build homes or buy them on the open market.
- Borrowers unable to continue to meet their mortgage commitments to be able to transfer ownership to a local council, and pay rent as tenants.
- Scrapping of the tax allowance on mortgage interest for landlords, greater security for private tenants and rent caps. Introduction of a rent commission to “bring rents back into line with incomes,” and landlords to improve the energy efficiency of homes.
- Abolition of the welfare cap, and a re-balancing of economic prosperity in the UK to reduce demand in London and the south east.
The Scottish Nationalist Party
- Priority for affordable housing and an extension of its record of providing council houses through the Scottish parliament. Implementation of new measures to scrap the Right to Buy for new council homes in Scotland.
- Re-instatement of the spare room subsidy, and opposed to cuts in in-work benefits.
- Extend HomeBuy to help first-time buyers and allow “people to buy houses in their town or village.” Reform of the home-buying process, so that legal fees are paid by the person withdrawing from a house sale, not the purchaser.
- Higher council tax charges on second homes, particularly where ownership of them makes it harder for local people to buy. Improvements to environmental performance of homes through a Green New Deal, and lower VAT on house repairs.
- Introduction of rent controls, enhanced rights for tenants and a study of how savings from housing benefit and additional borrowing powers could support the construction of social housing. Measures to bring empty homes and other suitable buildings back into the housing stock.
The Democratic Unionist Party
- Help for first-time buyers, with a home loan scheme for graduates in subjects needed to improve the economy. Promotion of shared ownership, with more opportunities to part-own and flexibility to change the share of the property owned by the occupier. Wants to examine schemes to help borrowers with mortgage problems, and provide practical advice and support.
- Supports an early decision on the fundamental review of the Northern Ireland Housing Executive, separation of strategic and landlord functions, and measures to make social housing more self-financing. Plans to work with housing associations to provide more affordable homes.
- Wants a Northern Ireland Housing Forum involving all housing providers and relevant government departments. A better balance between funding newly-built property and maintaining existing social homes, and wants to explore setting up a single regulator for the whole housing sector.
- Supports certainty on Housing Executive rents, with revenue used to re-instate properties, maintain homes and promote energy efficiency. Wants to introduce a light touch, mandatory register for private landlords.