Property & The General Election

Housing professionals are divided as to which party offers the solution to the property market

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With just a few days left until the 2010 General Election,  housing professionals are divided as to which party offers the best solution for the continued recovery of the property market.

All of the main party manifestos promise a better deal for home owners and first-time buyers.

The Conservative Party manifesto promises that they “will permanently raise the stamp duty threshold to £250,000 for first-time buyers, meaning nine out of ten of them will pay no tax on their first home purchase.”

They also promise to introduce a scheme to enable social housing tenants “to own or part-own their home. We will introduce a ‘foot on the ladder’ programme to offer an equity stake to good social tenants, which can be cashed in when they move out of social rented accommodation.”

Labour too has pledged to fold the threshold for stamp duty at £250,000 for first-time buyers, but only for two years. “This will be paid for by increasing stamp duty to five per cent for homes worth more than £1 million. Our highly popular Home Buy Direct scheme will continue.

Labour also have undertaken to subsidise social housing for families who usually do not qualify.

”We will work with Housing Associations to develop a new form of affordable housing targeted at working families on modest incomes who struggle in the private sector and rarely qualify for social housing. This will focus on enabling working people to rent an affordable home at below market rates while they build up an equity stake.

“We are investing £7.5 billion over two years to 2011 to build new houses, delivering 110,000 additional energy-efficient, affordable homes to rent or buy. We believe local authorities should be able to play their part in providing social housing in the future; and we will reform the council house financing system to enable local authorities to maintain properties at the Decent Home standard and to build up to 10,000 council houses a year by the end of the next Parliament.”

The Liberal Democrats vow to “bring a quarter of a million empty homes back into use. Empty properties are not only a wasted resource but blight on the local community, attracting crime and antisocial behaviour.

“People who own these homes will get a grant or a cheap loan to renovate them so they can be used: grants if the home is for social housing, loans for private use. This is cheaper than building new homes, is greener and helps to regenerate streets where empty homes stand derelict.”

A straw poll of professionals in England and Wales suggested that the housing market favours a Conservative victory though is nervous at the prospect of a hung Parliament, still the likely outcome according to latest polls.

“Obviously the housing market will do well in a low tax, low public spending economy where bureaucracy and regulation is reigned in and that's traditionally what you'd expect from a Conservative government,” said one London Estate Agent. “Pegging Stamp Duty at a quarter mill doesn't hurt, but controlling interest rates and getting the banks to actually lend is far more important.”

“Based purely on the manifestos, we'd probably plump for a Conservative government, hopefully a majority,” a national Property Developer said.

“The worst case may be a coalition where the policies are all provisional and will only last as long as the coalition itself.”

“Instinctively I believe that the Conservatives will be good for the housing market, though I'm worried that if they do make the drastic public sector cuts that George Osbourne has hinted at, unemployment will go through the roof. Unemployment and the fear that people will be laid off is never good for business in the long term. But realistically, unemployment will rise whoever gets elected,” said a York-based mortgage broker and financial adviser.

“The immediate outlook for the property market is uncertain,” said Decision Homebuyers director Anna Buck. “Regardless of who is elected next week, the volatility is going to continue and the recovery will be fragile. We are here as a lifeline for sellers trapped in a sluggish market as well as people whose lives have been made more desperate by the recession.”

May 3, 2010