Conservative vs Labour: What Impacts May the Housing Market Face?
With the upcoming general election, expected to happen in 2024, both Labour and Conservative parties are looking to attract voters through changes to housing policies.
Due to uncertainty and disagreement within both parties it can be hard to determine each parties’ stance on the proposals put forward. Below is a brief outline on how the housing market may be affected:
Conservatives: The introduction of Renters Reform Bill happened in 2019 and has now been brought to parliament. Essentially the bill outlines plans to abolish Section 21, for tenancies to become periodic agreements, for new standards and an Ombudsman to be introduced.
Labour: The Labour party has clearly expressed doubts around the Renters Reform Bill, yet still plan on giving tenants new rights and protection. This is with the promise of a Renters Charter as opposed to the Renters Reform Bill. This means an end to no fault evictions, a right to pets and an end to automatic evictions for rent arrears due to a four month notice period for landlords.
Boosting Housing Supply
Conservatives: Progress has been made towards the aim of building 300,000 homes by mid 2020s. However, this goal has recently been stated as “advisory”. Furthermore, homeowners will also see looser restrictions for extensions, conversions and renovations to new properties.
Labour: Labour have offered 300,000 new homes by mid 2020s from the point of election, if elected. The party also aims to upgrade planning laws so local authorities have more influence in what is built and where.
Increasing Rent Controls
Conservatives: The Conservative party has clear opposition to rent controls as stated in the Renters Reform Bill white paper - “this government does not support the introduction of rent controls to set the level of rent at the outset of a tenancy”.
Labour: There are currently differing views within the party but new beliefs are surfacing that rent controls may end up leading to homelessness. Due to call for rent freezes only appearing in major cities, it is unlikely that this will ever be nationwide if introduced.
Regulating holiday homes and short term lets
Conservatives: The party is planning on tightening rules around accessing business rates for short term lets.
Labour: Labour are considering increasing the 3% surcharge for second homes and increasing the council tax to 300% maximum.
Abolishing the leasehold system
Conservatives: Conservatives no longer pledge to end and convert to a commonhold system from the leasehold system. Instead, we can expect a cap on ground rents, more power for tenants to choose their property management company and a ban on forcing leaseholders to pay legal costs.
Labour: Many in the party approve the end of the leasehold system and want to implement the commonhold system instead.
Capital Gains Tax
Conservatives: Capital Gains Tax faced a decrease to £6000 in April 2023 and is set to decrease further to £3000 in April 2024.
Labour: The Labour party has shifted to a focus on not overspending public money rather than taxing the wealthy.
Upgrading Energy Efficiency
Conservatives: Prime Minister Rishi Sunak has decided to scrap the proposal of stricter minimum efficiency standards but will still "encourage households to do so where they can." Up until recently the Conservative party had outlined a policy for all tenanted properties to reach EPC rating of at least C by 2028.
Labour: Due to the delivery of the “National Warm Homes Plan”, Labour plans to offer EPC C ratings in all homes within a decade. Whilst no details have been shared as of yet, the party plans to give more resources to local governments to help with these upgrades.
Despite the uncertainty, it is exciting to see housing policies form a major position within manifestos of the upcoming elections.