With only days to go until the election, housing seems to be at the top of the agenda for the political parties as they battle it out for Downing Street. Just this weekend Labour have announced two major proposals focused both on the lettings and sales market in the hope to tempt younger voters onto their side.
Firstly, Ed Miliband announced they would impose rent controls should they come into power, which would mean that landlords will only be able to increase rent for tenants by less than inflation for the duration of a contract. The party have already stated in their manifesto that it wants three-year tenancies as standard. They say that they are proposing these policies to help provide security for renters and help to keep the rentals affordable, which, on the face of it, is likely to appeal to millions of tenants around the country and particularly in London.
But how likely is that rent controls will provide this? Winkworth’s Chairman, Simon Agace, says that the reality of rent controls is far from the picture of security and control that Labour paints. “I started my career in the property world as a chartered surveyor in the late 1960s when I witnessed the ending of rental controls, which healed the damage done on the provision of homes and improved the quality of property in London. I therefore note the current climate with a certain degree of anxiety for the home-buying public,” he comments.
“The rental market has changed for the better as a result of some excellent regulation, but there is a delicate balance between regulation and altering the relationship between tenant and landlord. Intervention on rents and security of tenure has in the past damaged both market liquidity and good business values.”
Conservatives agree with this view, arguing that the policy would drive up rents and extinguish investment in the sector leading to poorer quality housing and fewer properties to rent.
For the sales market, however, Labour has proposed to abolish stamp duty for first time buyers of properties up to the value of £300,000, which at its maximum could save them £5000 in fees. “It is simply too expensive for so many young people to buy a home today, saving up for the deposit, paying the fees and having enough left over for the stamp duty,” stated Ed Miliband, “So we are going to act so we can transform the opportunities for young working people.”
With stamp duty already receiving a huge overhaul at the end of last year under the Conservatives, which helped a large section of the market, this latest reform would only serve to help this end of the market further.
Labour isn’t the only party looking to appeal to this end of the housing market though. The Conservatives have already announced their Help to Buy ISAs following the introduction of their Help to Buy policy in 2013. Help to Buy ISAs will allow first time buyers to save for a deposit and will be granted 25p by the government for every £1 saved.
So, housing is a hot topic on the agenda this election and seems to be the issue that is distinguishing the different parties as we move towards polling day.