Results of December 2019 general election
20 different ideas about why to connect with the property industry
December 19, 2019
What you need to know about property value?
January 18, 2020The results of the December 2019 general election are in, with the Conservatives winning the majority.
The strong election win could mean there will be more stability in the housing market. This means some homeowners are sure to benefit from the results. As far as the housing market is concerned, the Conservative majority is likely to give people the assurance they needed that things are not about to drastically change with a new government. As such, buyers and sellers who were holding off for the result are likely to now begin to move again. Further to this, developers are optimistic that the added certainty to the market means they can move forward with more confidence, boosting the country’s house building aims.
In the Conservatives’ manifesto, they pledged to extend the Help to Buy scheme from 2021 to 2023. While the Help to Buy ISA scheme was closed to new applicants from 30 November, other elements of the scheme will remain in place, including shared ownership and the Help to Buy equity loan.
The Conservative Party made some bold election pledges to appeal to both those with a home, and young people with aspirations of buying, with promises for longer-term fixed-rate mortgages offering greater financial security and stability around mortgage costs.
However, further pledges on housing policy weren’t the most imaginative: a million more homes of all types, ‘fairer’ shared ownership and ‘more support’ for first-time buyers. They are the right themes for an effective housing strategy, but need a lot more detail, ambition and focus to be brought to life.
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First-time borrowers would only need to put forward a 5% deposit on their homes while being able to keep mortgage payments at a guaranteed amount until the full mortgage is paid off. The move is part of the Tory push towards homeownership, which has included cuts to stamp duty for first-time buyers.
But borrowers may need to take action to lock in ultra-low interest rates on their borrowing as the uncertainty that has kept a lid on interest rates fades.
Depending on their circumstances, the amount and duration of their loan or debt, those with mortgages as well as credit cards and other credit with varying levels of interest charges should dig out their paperwork to cheap what they are paying and if they can lock in a decent rate now. While interest rates aren’t about to immediately soar, its definitely time to get on top of your spending.
Boris Johnson has referred to cutting stamp duty on all homes worth £500,000 or less. This move would save first-time homeowners £5,000 and all other homeowners £15,000. Johnson also wants to cut the top rate of stamp duty from 12% to 7%. This move is in hope that property transactions in London and the South East – where there is a higher average house price – will be boosted.
One promise in the manifesto, which was echoed in part by all the major parties, was to bring in an additional charge for non-UK residents buying UK property. An additional 3% surcharge would be placed on residential properties bought by both individuals and corporations based overseas.
The Conservatives have pledged to continue with their plans to abolish Section 21 ‘no-fault’ evictions in order to make private renting tenants feel more secure in their homes. The move has been criticised by some in the industry, with many worried it could make evicting tenants more costly and difficult, even when there is a valid reason. However, with improvements to the current system, the hope is that it would make the private rented sector fairer for all.
The idea of renters paying one deposit which then moves with them when they move rental property was first coined by the Residential Landlords Association and has been picked up by the government. Moving house within the private rental sector is sometimes prohibited by the large deposits needed by tenants – which in some cases must be paid before having received the deposit back from the previous property – and this would essentially be solved with this change.
Tenants would need to produce a digital certificate to prove their deposit was still being held through the previous property, and then the money would transfer directly to the new landlord.
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