Housing and a focus on first time buyers appears to be one of the main commitments of the major parties as their manifestos are published this week.
Labour were the first to announce their plans over the weekend, although their manifesto is yet to be published in full. Party leader Sir Keir Starmer announced on X over the weekend plans to introduce a “Freedom to Buy” scheme which would be a permanent government guarantor for mortgages.
“After 14 years of the Tories, the dream of home ownership is out of reach for too many young people. With our Freedom to Buy scheme, my Labour government would make it a reality again. My parents’ home gave them security and was a foundation for our family. As Prime Minister, I will turn the dream of owning a home into a reality.”
In response the Conservatives announced plans to reintroduce the Help to Buy scheme and abolish stamp duty for first-time buyers on properties worth less than £425,000. In an interview on the BBC Prime Minister Rishi Sunak admitted it had become more difficult for people to buy their own home. Asked the question ‘having your own home has got harder under a Conservative government hasn’t it‘, Mr Sunak responded saying ‘it has got harder and I want to make sure that it’s easier‘ committing to ‘not just build homes in the right places‘ but to support employment prospects because the challenge for young people, he said, is saving for a deposit.
Speaking at the launch of the party’s manifesto launch at Silverstone, Mr Sunak said the Conservative party had built 1m homes in the last Parliament, and would build a further 1.6m in the next. ‘It is we Conservatives‘, he said ‘who are the party of the property owning democracy in this country.’
This week the Liberal Democrats have published their manifesto in which outlines their commitments should they be elected at the General Election on July 4th. The party would
- commit to increasing the number of new homes being built to 380,00, of which 150,000 would be social homes, a year.
- ban no-fault evictions, standardise the length of tenancy contract to three years and create a register of licensed landlords.
- abolished leasehold tenure and cap ground rents; something it had been hoped would be achieved by the Leasehold and Freehold Reform Act passed on the final day of Parliament, but ended up being significantly watered down from its original intentions.
In it’s manifesto, which it describes as a ‘working draft’ of a contract with readers, Reform UK commit to cutting stamp duty entirely for properties under £750,000; and introducing a 2% band for properties from £750,000 to £1.5,; and 4% thereafter. Reform UK would also abolish Inheritance Tax for estates under £2m, with a 20% rate above £2m.
Stamp Duty has become a political football in recent years; with the Conservative party using it as a tool to incentivise the market as COVID-19 lockdown restrictions were eased in 2021, before Liz Truss introduced the current first-time buyer stamp duty nil rate threshold for properties up to £425,000 in 2022. The current exemption is due to finish in March 2025.
Commenting on the SDLT commitments of the major political parties Simon Brown, CEO, Landmark Information Group says
“Cutting Stamp Duty Land Tax will go some way in temporarily stimulating housing demand and generating economic activity. However, stimulating house-buying and selling activity through a reduction in stamp duty needs to be matched with long-term reform which addresses the underlying inefficiencies in the market. A cross-market effort to innovate and remove friction in the process is needed. Without this, siloed processes and insufficient digitalisation, compounded by overburdened professionals, will continue to impact the volume of completions, thereby potentially mitigating any positive effects of this tax cut.”
Property portal Rightmove have welcome the focus on property. Tim Bannister says
“It’s good to see housing get more focus and attention. Some of the proposals announced this morning sound like a start, but there’s still scope to go further in helping the majority of first-time buyers or removing barriers to movement. Stamp duty reform is the number one change that home-owners and estate agents would like the next government to introduce, so it’s good that it’s being addressed.
However, keeping the existing thresholds for first-time buyers is the minimum we would hope for, and an election would seem an ideal opportunity for greater change. The headline proposals don’t appear to support people looking to downsize, or address the significant regional differences in property prices, and therefore stamp duty.
“More support for first-time buyers is the most requested priority for the next government by renters, so a new policy designed to help people to get onto the ladder would be welcome in the short term. However, the focus should be on long-term solutions in addition to short-term support, and any new policy needs to consider the potential knock-on effects of that policy on the wider housing market.
“It’s an interesting area to consider how renters may be supported in purchasing the home that they live in from their landlord, in the event that they wish to sell. One barrier to this is that many renters live in properties that they would be unable to afford to purchase, as the typical affordability criteria to rent a property can be more accessible than the requirements to buy.”
