Manifestos, Policies & Pledges – How will they effect the property market and investors in 2020?

So the gloves are off in the General Election campaigning.

The live television debates are in full flow and MP’s are pounding the pavements trying to convince us they have the answers. Whilst Brexit continues to dominate discussions and will have a big impact on the end result, there are specific manifesto pledges and policies which will have an impact on the housing and property sectors specifically.

Let’s take a look at some of these below.

Labour

Headlines include:

·      Phased increase in Corporation Tax to 32% may put many small business and private investors under too much pressure to survive, many of whom have just switched their mortgages etc into Ltd Company structures.

·      Housebuilding - Labour’s new social house building programme pledges to build more than a million new homes over a decade, with 150,000 council and social homes being built a year by the end of the parliament.

·      Pledge to put an extra tax on foreign companies and trusts buying property in the UK. This would result in charging offshore firms 20% for property purchases, in addition to existing stamp duties and surcharges.

·      New Levy on British holiday home owners.

·      Private landlords will be forced to cap rent rises at the rate of inflation, with cities being given new powers to impose further caps.

·      Introduce rent controls for more than 11 million people renting in the private sector, as well as introducing "open-ended" tenancies, designed to give renters greater security in their homes.

·      ‘Right to Buy', (the policy which allows council house tenants to purchase their property), would be effectively reversed, with new powers and funding for councils to buy back former council houses from private landlords.

Conservatives

Headlines include:

·   Stamp Duty increase on non-UK residents – companies and individuals who buy property in the UK, but are not resident here, will have to pay a 3% surcharge.

·      Measures to help first-time buyers and boost private house building, promising a million homes over the next five years.

·      Tackle "wasted vacant housing stock" by allowing local authorities to increase council tax by up to 500% where homes are left empty for more than six months.

·      A number of policies are designed to appeal to first time buyers and private renters, including:

·      Launch a ‘Rent-to-Own’ scheme, which would see social tenants build up an equity stake in their homes over 30 years

·      Introduce "lifetime" fixed rate mortgages to make it easier for renters to get on the property ladder. Under the plan, buyers would only need a 5% deposit to secure the keys to their first property. This would mean their mortgage payments would remain the same until it was paid off, and they would not be hit by spikes in interest rates.

·      Introduce a  'First Home' scheme, which will sell properties at a 30% discount to first time buyers seeking a property in their local area.

·      Private tenants would be entitled to 'Lifetime Rental Deposits', which could be transferred from one property to simplify the buying process and cut fees.

·      Pledge to end no fault evictions.

Lib Dems

Headlines include:

·      Pledge to increase stamp duty for foreign buyers of residential property.

·      Similar policy to Labour when it comes to taxing holiday homes and are proposing an increase in council tax.

·      Housebuilding - Have Set out plans for 300,000 new properties a year - a third of which would be social rented homes.

Questions remain from all the political parties as to whether their plans will stifle or stimulate house-building and whether they will put foreign buyers off investing in the UK market.

Other big issues being discussed in the corridors of Westminster and Local Councils include: Land Price Stabilisation, Removing SDLT and replacing with a Progressive Property Tax, Landlords losing Section 21, Removing Permitted Development Rights, Council Tax charges on individual HMO Rooms.

Whether it’s ‘Real Change’ or just ‘smoke and mirrors’, there can be no doubt that change of some kind is most definitely on the horizon.

Property Investing has always presented challenges, and some of these proposals will strike fear into the hearts of many existing landlords and investors, who are already feeling battered and bruised by recent tax changes.

2020 certainly looks like it’s going to be an interesting year, full of challenges and opportunity.

[Disclaimer – this summary is accurate at the time of writing, and does not reflect a bias toward any particular party. If the last few years is anything to go by, policies, pledges and promises may be subject to change and dramatic U-turns at any given moment!].