The major political parties have been outlining their housing policy if elected next month.
The Liberal Dems are the latest to show their hand in the For a Fair Deal Manifesto 2024. The party has pledged to ‘build the homes people desperately need’ by expanding neighbourhood planning across England; building ten new garden cities and allowing councils to buy land for housing based on current use value rather than on a hope-value basis by reforming the Land Compensation Act 1961.
Labour has pledged to get more young people on the housing ladder through its freedom to buy scheme.
The move will see lenders offer mortgages with a 5% deposit, with the government acting as guarantor for part of a home loan, if Labour wins the 4 July general election.
It makes permanent the Conservative government’s mortgage guarantee scheme introduced in 2021. Labour says the plan will help over 80,000 young people get onto the property ladder over the next five years.
Then we have the Conservative Party’s plan to bolster homeownership among young Britons, by cutting stamp duty for first-time buyers. The £425,000 threshold for first-time buyers was initially raised from £300,000 on a temporary basis, with the party now looking to make this permanent.
The initiative seeks to address the housing affordability crisis and stimulate the property market, hoping the tax pledge will benefit around 200,000 households every year.
According to group chairman of Cornerstone Tax David Hannah, reforms to Stamp Duty thresholds as opposed to looking at rate cuts would be essential in getting the bottom end of the housing market moving in the long-term.
“SDLT payment bands have been long overdue for an overhaul as they have never been index-linked to house price inflation. An increase to these thresholds would stimulate activity at the lower end of the property market and allow first-time buyers to reduce the amount they need to borrow, thus improving their affordability calculations.
He added: “As we all know, a rising tide lifts all boats, those looking to purchase properties on the mid-to-high end of the property market will now have a chance to sell their low-end properties as a result of the increase in demand from prospective buyers, contributing to further momentum within the housing market.”
However, Marchwood IFA mortgage broker James Gordon is largely underwhelmed by the party promises made so far.
“I am pretty cynical about anything political to be totally honest. As far as the Lib Dems go I mean, brilliant, well done lads. They can say what they want because ultimately, they’ll never be held to account on anything or have to follow through.
“Conservatives keeping the threshold at £425,000….. I guess a good thing but again, that’s only until they decide not to. I would think that at some point that threshold will be (and will have to be) increased to get the market moving again.
As for Labour’s permanent mortgage guarantee scheme: “Along the lines of help to buy? Not sure Help to Buy has been a great plan to be honest. Even though it’s a bit more complicated we’re more fans generally speaking of Shared Ownership.”
Shaw Financial Services mortgage broker Lewis Shaw is similarly unimpressed with the party pledges so far.
“Parties trying to bribe potential first-time buyers will go no way to addressing the issues that are at the heart of the housing crisis. We need real change to happen economically before any of their pie-in-the-sky ideas can go anywhere. Every political party pledges to build millions of homes and never succeeds, so why should anyone take any notice of these pledges?”
“They won’t happen and all this results in is more apathy towards politicians. They need to stop crying wolf and be honest. The economy is knackered, housing is knackered, and there is no easy or quick fix.”
Kerr & Watson director and mortgage broker Daniel Watson says the Conservative’s promise to maintain the first-time buyer stamp duty threshold at £425,000 is generally seen as positive, potentially easing the financial burden for new buyers. However, he argues that it fails to tackle the root issues of high house prices and affordability.
“Labour’s plan to make the mortgage guarantee scheme permanent aims to help buyers with low deposits. Yet, given that many lenders already offer 5% deposit options. The consensus is that while this policy shows Labour’s intent to support first-time buyers, it does not address the broader affordability crisis. High mortgage rates and house prices remain significant barriers that a low-deposit scheme alone cannot overcome.
What of the Liberal Democrats proposed building of 10 new garden cities and introducing a new Rent to Own model?
“These ideas reflect a more innovative approach, aiming to increase housing supply and offer alternative pathways to homeownership. However, scepticism persists regarding the feasibility and potential impact of these plans, especially without substantial incentives for home builders.”
He concluded: “The announcement of the General Election has significantly increased property demand. Despite high house prices and interest rates, we’ve seen an increase in enquiries, likely driven by pent-up demand and tenants seeking to escape high rents also historical trends suggest mortgage approvals often rise around elections.
“However, I have concerns that the proposed policies from all parties lack the bold innovation needed to solve long-term housing issues. There is a call for more ambitious plans that include not just targets, but also practical incentives for home builders to create affordable housing.”
