Theresa May’s call for a snap general election on June 8 took many by surprise. But estate agents have been broadly supportive of her decision, with many taking the view that the election would be positive for the sector, as it presents the main political parties with an opportunity to address voters’ concerns about housing, and not just focus on Brexit.
Ahead of the general election, all political parties have made housing a primary political issue and set out clear strategies on how they would tackle the shortage of residential properties across the UK.
“The need for a greater supply of housing has appeared in all the political party manifestos and we hope that following the general election these promises will be acted on,” said Richard Sexton (below), director at e.surv.
He added: “As a country, we are facing a housing crisis as many buyers struggle to save up for large deposits, and this is putting more pressure on the widening affordability gap.
"To ensure market fluidity we need to see significant investment in our country’s housing stock to get more people onto the housing ladder.”
With successive governments failing to build enough housing - particularly social housing - the UK is in the grip of a worsening crisis, with homelessness on the rise.
So which party is capable of fixing that?
Russell Midgley, director of Aspen Woolf, commented: “It seems that the Labour and Conservative parties are laying out plans to provide more social housing, help the homeless and enable renters to become owners of property. It’s about time they agreed on something. It’s now a case of which is the likely party to follow through?”
But Anthony Aitken (below left), head of planning at Colliers International, identified the Liberal Democrats’ manifesto as potentially offering the greatest solution to the chronic shortage of homes, as it quite simply, unlike the other manifestos, fails to mention anything about pledging to protect the greenbelt.
“Their silence speaks volumes, and may suggest that the Lib Dems are prepared to address the elephant in the room,” said Aitken. “There is widespread recognition that more needs to be done to help developers build more new homes.”
With housing high on the political agenda, all the major parties have pledged to tackle the housing crisis by promising to build significantly more homes every year to help alleviate pressures on housing stock.
Similar promises were made ahead of the last general election in 2015, with the Tories committing to delivering one million new build homes during the course of this parliament to tackle a ‘decades-old deficit’.
But the head of planning at Colliers was scathing about the existing government’s failure to meet its target of delivering 200,000 new homes a year, or anywhere near the 300,000 new properties that the House of Lords Economic Affairs Committee last year recommended should be delivered each year.
“With the government consistently missing its targets, there are a phenomenal number of homes that are simply not being built each year,” he said. “We need more real homes for real people, but it seems, unless something changes, that that there will be an ongoing housing shortage throughout the rest of my career.”
The failure to construct enough homes means that Britain’s housing shortage has now reached crisis point, with the number of prospective buyers and renters dramatically outweighing the volume of homes on the market, while restricting the level of housing stock agents have to offer.
The latest figures from NAEA Propertymark show that the supply of homes available to buyers dropped to just 36 in April, down from 39 properties in March.
But despite their proposals, none of the main parties have shown a particularly good understanding as to how to fix our ‘broken’ housing market, according to Jeremy Leaf, the former RICS residential chairman.
The north London estate agent said: “New ideas to address the growing discrepancy between the government’s own estimate of annual household formations of 240,000 each year until at least 2032 with the current provision of only around 152,000, would be a good start. Where are the ideas for improving planning and delivery? The same ingredients will only produce a similar cake.”
He believes that the Conservatives “have talked a good game” about delivering one million new homes by 2020 or 1.5 million by 2022, but have demonstrated “little evidence of coming remotely close to those numbers”.
Leaf (right) described Labour’s ideas as “equally baffling”, while he believes that the Lib Dems’ ambitions for 300,000 new homes a year “seem unlikely to be met without clear measures of how this will be achieved”, although he accepts that the party’s proposal for a Housing and Infrastructure Development Bank to finance new garden cities “sounds interesting”.
“Disappointingly none of the three main parties mentioned modern methods of construction as a more radical solution for increasing supply,” he added.
While the bulk of the housing policies proposed by all the parties are aimed at building new homes, many property professionals are more concerned about property taxation.
There are various taxes that key industry figures would like to see addressed, but above all else, the overwhelming majority want the government to deliver a U-turn on stamp duty hikes.
Housing transactions and prices at the top end of the market are faltering due to stamp duty reforms, while those acquiring additional homes, including buy-to-let properties, are being harshly penalised by having to pay a 3% stamp duty surcharge.
“Whilst all the major parties have outlined some proposals regards housing, our desire is that one key item is addressed, SDLT. This has halted serious growth and stopped the higher end homes from moving, but some may say that’s the plan,” said Henry Fordham (left), managing director of Bellis Homes.
Mark Parkinson, director at Middleton Advisors, agrees that stamp duty urgently needs addressing.
He commented: “It is all very well beating the top end over the head with tax to satisfy voters, but the drop in transactions is beginning to affect the industry itself with most agencies cutting jobs and the affect will reach further as less people move house.
“Mortgage interest rate relief was always a popular policy and might go some way to mitigate the inevitable rise in interest rates.”
History shows that high transactional taxes does not necessarily lead to increased tax receipts, as illustrated by the existing stagnant market in prime central London caused by the 15% stamp duty at the top end, which Alex Newall, managing director, Barnes Private Office, argues is not good for the mobility of people or social change across the country as a whole.
He commented: “A bottleneck has been placed on the market and sellers are struggling to sell with transactional volumes down by as much as 28% month-on-month according to recent HMRC Land Registry across the country, and up to 70% above £10m in prime central London according to LonRes.
“This Tory policy has made residential property less ‘liquid’ as an asset class and ultimately is pushing values down, and driving many into negative equity – ultimately risking home ownership. I do not agree with limiting the demand from taxation, when it is more houses that are needed, not added pressures within the market place.
“A Tory government has made many changes to the property market – some of them have not been so good. However, in the end, I feel Labour would be a worse bet.”
Labour published its manifesto almost three weeks ago, and yet there remain a lot of unanswered questions on how the party would tax homeowners.
Charles Curran, principal and data analyst at Maskells, asked: “Will we see a new tax on land from Labour, such as a Land Value Tax, which will please core Labour voters? Will this be in addition to or instead of council tax?”
He added: “We assume that Labour will keep SDLT as it stands. We also note with interest that Labour is keen to cut Right to Buy - taking the aspirational element away of owning a home for those working hard.
“The Conservatives have in the past been the ‘friend’ to the property owner but with the party now adopting a new centre-left position, this may not be case post the election, particularly as whoever wins the election needs to raise tax receipts.”
Many people believe that despite the narrowing of the opinion polls in recent days, the election result is a foregone conclusion. After all, Theresa May called the general election in favourable circumstances, with a lead of around 20 points.
“There is no point in talking about any other political parties’ proposals to fill in the gap of the housing shortage other than the Tory party since, after all, the others are all inevitable ‘also rans’ and will not stand a ‘snowflake’s chance in hell’ of gaining power,” said Trevor Abrahmsohn (right), managing director of Glentree International.
He continued: “Instead of looking initially at the funding problems, or the shortage of land, why not fix the chicane of the supply problem which is the planning departments of the local authorities who give consents for the various schemes.
“Bureaucracy, pedantry and slavish regard to ecology at the expense of everything else is the order of the day, rather than the pragmatic desire to process applications in a timely fashion in order that housing schemes get built - and fast.”
Abrahmsohn would also like to see schemes like Help to Buy and Right to Buy expanded.
“These schemes have helped many in the lower price brackets get 'their foot onto the property ladder' and out of the ever decreasing rental spiral, so that they could then benefit from the rises in the property market where debt shrinks in relation to equity,” he added.
Like many, John Elliott, managing director of Millwood Designer Homes, believes that the election result is in little doubt: a Conservative victory. But what impact does he think the Tories will have if they are elected back into office?
He said: “I think the mandate for Theresa May will strengthen their commitments and promote their new homes policies quite significantly.
“I definitely think there will be greater stability economically and renewed confidence for the housing market, if the Conservatives are elected again. The five year term and a workable majority for them will make a huge difference, which will be extremely beneficial to the stability of the country as a whole.
“Now Brexit is fully on course and Article 50 has launched, I believe we will witness a positive effect on the housing market.”
Elliott (below) would also like to see the Help to Buy Scheme extended for a few more years at least, because “it has been so successful”.
He added: “Over 259,000 completions have taken place and more than one million people have used the scheme helping to boost demand for new homes and get many on the housing ladder, who otherwise could not afford to do so.
“The product is a brilliant piece of financial engineering, which will not only does its job superbly well, but is not a burden to the taxpayer, or to the UK as a whole.
“I have no doubt that with a new and solid mandate for five years that the combined effects of the various schemes and a confident government will start to show results quite soon after the election.”
But while a Tory win remains the most likely outcome, the fact that Labour continues to close the gap on the Conservatives in the opinion polls means that the sweeping majority Theresa May had banked on – and the pre-campaign polls seemed to suggest – is not as much of a foregone conclusion as it once was, and that means there is still all to play for.
So where does each of the main parties stand on housing?
The Conservatives has pledged to build up to 1 million new homes (2015-2020) and an additional 500,000 by 2022, free up land for new homes, boost the supply of council housing, continue with the Help to Buy scheme to support those struggling to buy a home until 2027, and maintain existing protections on Green Belt and in National Parks and Areas of Outstanding Natural Beauty.
Labour has vowed to build over 1 million new homes by the end of the parliament, including at least 100,000 council and housing association homes a year for affordable rent or sale, give councils new powers to build properties, offer local people buying their first home first refusal on new homes built in their area, suspend Right to Buy, extend Help to Buy until 2027, prioritise brownfield sites and protect the Green Belt.
The Liberal Democrats want to deliver 300,000 new homes annually by 2022, including 500,000 affordable and energy-efficient homes, lift borrowing cap on Local Authorities (LA) so they can build council and social housing, and give them the option to end Right to Buy, scrap exemptions for affordable homes on smaller developments, create at least 10 new Garden Cities, and enable LA’s to implement levy of up to 200% council tax on second homes.