The results are in and it’s safe to say that not many people saw that coming. The pundits and pollsters mostly predicted a hung parliament but the Conservatives were the first ones past the post, leaving Paddy Ashdown literally eating his (marzipan) hat.
The dust has settled and the opposing leaders have stepped down, but what are the Conservatives planning to do with the property sector? There are some key points held within their manifesto.
What to expect over the next 5 years:
- By working through their long-term economic plan, the Conservatives are looking to keep mortgage rates lower for longer.
- First time buyers can expect support in the form of 200,000 new starter homes at a 20% discount, exclusively for them.
- The Tories plan to give wannabe first time buyers £50 on top of every £200 they save towards a deposit with their ‘Help to Buy ISA Scheme.’
- The extension of the ‘Right to Buy’ to those living in Housing Associations.
- Tenants will have to rent the property for at least three years before being able to purchase it for a discounted price.
- The Creation of a £1Billion Brownfield Fund to unlock the construction of homes on brownfield land.
- Protection of the Green belt and support towards locally-led garden cities.
However, this is politics. Who knows how many of these policies will come to fruition and which will go the same way as a Nick Clegg promise. A majority government does encourage more confidence on these matters than a coalition though and the early suggestions are that it’s a good time to join the property industry.
Overseas investors are storming the market
Journalists weren’t the only ones burning the midnight oil on election night. London estate agents saw an onslaught of business, minutes after the exit polls reported that David Cameron could once again take up residence at Number 10. With the fear of Labour’s mansion tax on homes worth over £2million gone, foreign investors felt safe to make a few multimillion pound purchases. The sudden surge of investment has also left estate agents in a more comfortable position than 2008, with stocks in companies like Zoopla and Rightmove already rising.
The ripple effect
One prediction on everyone’s lips right now is the renewed ripple effect that London could create. With foreign investors flashing their cash around London, those looking to move away from the economic powerhouse may find it much easier to sell their pricey London houses, allowing them to take advantage of the price difference throughout the rest of the country.
A surge in prices
All of a sudden what appeared to be a buyers’ market has suddenly become a seller’s market. The election result has seemingly boosted investor’s confidence in the UK housing market, but a shortage of top end London properties for sale will only create a surge in price currently estimated at 10%-20% over the next 5 years.
What would have happened if Labour won?
While a collective sigh of relief can be heard from the property sector, Labour voters and the entire ‘Milifandom’ cult are currently wondering what the next 5 years could have held. So, according to their manifesto, what would a Labour leadership have done differently?
- Houses worth over £2million would have been subject to a Mansion Tax of an extra £250 a month.
- They say the money raised through this tax would go to supporting the NHS.
- Labour would have tried to ensure 200,000 homes are built annually by 2020, almost double the current level.
- Three year tenancies would have been the norm, with a cap on excessive rent increases.
- Unfair letting agent fees would have been banned, with the aim of saving those looking to rent around £600 if they decide to move house.
The focuses of the two parties are what you’d expect. While the Tories are looking to help first time buyers, Labour were hoping to make the wealthiest contribute more. There’s enough in the corresponding manifestos to suggest that if Labour were in the process of moving in to Downing Street, the forecast for the property sector would be radically different.
However, the Conservative Cabinet has been formed and Greg Clark is the new Secretary of State for Communities and Local Government. The policies are in the pipeline and their presence is already affecting the sector. For many, the fulfilment of these promises will determine the success of our new Government.
Image Credit: Olibac Flickr