The UK has not had a majority Conservative government since John Major’s win in the 1990 election. For better for worse, what will this mean for the UK housing sector?
Although only time will tell what the Conservatives have in store for Britain, by observing the manifesto and assuming that promises made throughout the election are true, HAmag predict that the following sections of our industry are set to benefit under a tory majority government:
A Conservative government will not only extend the help to buy equity scheme to 2020 but also intends to introduce a help to buy ISA to support those who are saving for a deposit on a house. A brownfield fund will also be made available in order to encourage the building of 200,000 starter homes on brownfield sites. This will undoubtedly prove to be good news for private house builders for obvious reasons.
High value property market
The Conservative manifesto clearly illustrates a key drive in increasing house ownership across the UK. This will be great for estate agents. With the black cloud of the Labour-proposed mansion tax now dissipated, those in high value properties or involved in trading them can breathe a sigh of relief upon the results on the election.
The results will certainly split opinion within the housing industry, with certain aspects of the tory manifesto proving to be a cause of great concern for many. Here are some sectors that may not be so happy with the results:
The Tory’s have pledged to deliver an additional 275,000 affordable homes in the next 5 years. This is a good target but concerns have been raised as to where the new affordable housing will actually come from. The controversial right-to-buy scheme is set to continue, depleting the social housing stock further still, leaving the Conservatives looking for somewhere else to turn into affordable housing. This has resulted in speculation that the scheme will be extended to housing association properties, meaning that housing associations will be forced to sell off some of their properties.
Deputy Chief Executive of the Chartered Institute of Housing, Gavin Smart has commented on the proposal, saying “extending right to buy to housing associations is not going to tackle the housing crisis – in fact it could make things worse for people on lower incomes who are already struggling to access a decent home at a price they can afford.”
The implications of continuing Thatcher’s right-to-buy scheme and selling off social housing assets remain to be seen. Coupled with a further £12 billion worth of cuts to be made from the welfare budget on top of the £21 billion cut during the last Parliament, it appears that life will get harder for those reliant on the social housing system.
Universal credit will continue to be rolled out at length and the bedroom tax will not be scrapped, another worry for those in affordable housing.
Councils will be forced to sell off their high value housing stock to finance the right to buy extension proposals.
Wait and see
PM David Cameron has promised to introduce in a new housing bill in the first 100 days of the new Parliament. Watch this space over the following weeks as the housing sector learns what its fate will be!