What next for the housing market
The Conservative Party has always billed itself as the party of home ownership. From Margaret Thatcher’s Right to Buy to George Osborne’s Help to Buy, in government the party has always held that supporting people onto the housing ladder is good policy and good politics.
Constituencies with higher home ownership are more likely to support the Conservatives. Steps to increase this will help the Party hold on to newly gained Red Wall seats, whilst opening up further electoral opportunities. It has meant housing policy has taken on a renewed focus under Boris Johnson and Housing Secretary Robert Jenrick even as the pandemic has taken hold.
In the last year alone, the government has acted to quickly reopen the market (prioritising it over other parts of the economy), introduce and then extend the Stamp Duty holiday, and launch a mortgage guarantee scheme to support first time buyers.
So, what else is on the government’s agenda, and what are others calling for?
Reducing the property tax burden
The Stamp Duty holiday and subsequent extension has shown that fiscal policy levers can drive a boom in the housing market: both in terms of activity and prices. There are a number of calls for different reforms to Stamp Duty – from scrapping it entirely to boost transaction levels, to combining it with Council Tax to create a new ‘fairer’ property tax. It is clear that there is momentum growing for reform with influential voices on the centre right – think tank Bright Blue and Conservative MP Kevin Hollinrake amongst them – calling for action. But securing long-lasting change will be an uphill struggle. On the one hand the Treasury is concerned at losing tax revenue, and on the other it is fiercely resistant to anything that could be perceived as a ‘wealth tax’ hitting the Home Counties.
Making moving easier and quicker
One of the biggest challenges in the market is the length of time it can take for transactions to complete. As well as causing stress for movers, it opens them up to problems from gazumping and added costs. Whilst government has consulted on how it can reduce this, minimum progress has been made as government looks to industry and HM Land Registry to lead reform. In the face of increasing transaction lengths, political and sector appetite to achieve this may have grown, but there is still a lack of detailed proposals to endorse or take forward. As such, industry will need to build the case for change and highlight the benefit consumers could see.
Reforming our planning law
Planning reforms have become one of the government’s most contentious policies. Ministers believe it is crucial to cement Conservative success in the Red Wall and reach the elusive 300,000 new homes a-year target. To deliver its proposals, government will have to navigate significant pressure from southern Conservative MPs that fear swathes of new houses will be built in their constituencies. Already, dozens of MPs have voiced their discontent, with some fearing the electoral consequences of wide-reaching developments in the South. It means that when the Bill comes before Parliament in Autumn, the government will face a considerable challenge to secure its preferred solution and risks considerable concessions or animosity from within its own party.
WA is exploring these issues further in an upcoming webinar. Our panel of experts will be looking at what’s next on the government’s agenda and how industry and policymakers can work together to achieve a more vibrant market. Our event will bring together Ben Everitt MP, Conservative Member of the Housing Select Committee; Melissa Lawford, The Telegraph’s Property Correspondent; Simon Brown, Chief Executive, Landmark Information Group; and Angus Hill, Associate Director at WA. We’d love you to join us at 9am on Tuesday 8th June – to register for the event, please sign up here.