Tag Archives: conservative
Labour Party plans for UK housing market after general election criticised
Announcements from the UK’s Labour party on policies it would introduce if it wins the general election on rent controls and stamp duty for first time buyers have been met with considerable criticism from the property industry. Under the party's plans to tackle the country’s lack of new housing, Labour leader Ed Miliband said he would introduce a ‘first call’ policy that would give first time buyers who have lived in an area for more than three years priority on up to half of new homes. He also announced that he would scrap stamp duty for first time buyers on homes worth up to £300,000 and said foreign buyers would be subject to higher taxes and a ‘local first’ policy would ensure properties are advertised in the UK before they are promoted overseas. Miliband claimed that cutting stamp duty to zero would benefit nine out of 10 people buying their first home and could save up to £5,000. It would fund the stamp duty plans by tackling tax avoidance by landlords, pointing to HMRC figures that estimate it costs £550 million a year. Labour would want the creation of a national register of landlords, saying this would could tax avoidance by landlords by 20% and bring in £100 million for Treasury coffers. Tax relief for landlords to cover the upkeep of furnished properties would also be reduced for rogue landlords that rent out sub-standard properties. Also, under the plan private landlords would be banned from introducing above inflation rent rises over a three year period and landlords and letting agents would be required to disclose the rent paid by previous tenants, to allow renters to negotiate the best possible deal at the start of a contract. Mr Miliband said Labour's plan would help create ‘a stable, decent, prosperous private rental market where landlords and tenants can succeed together’. Jeremy Blackburn, head of policy at the Royal Institute of Chartered Surveyors (RICS) said that while the proposed stamp duty reform could help some first time buyers in the market, it’s another measure that tinkers with demand side stimulus. ‘Prices are already predicted to rise in the next parliament and this is only likely to make matters worse. The promise of one million homes by 2020 is an ambitious target, but Labour has not fully explained how they expect to remove obstacles to such a supply- ide revolution. What we need is a drastic increase in supply,’ he added. Building affordable homes is a better way of solving the housing crisis than reducing stamp duty, according to housing charity Shelter. ‘While reducing stamp duty may help at the margins, the only way to give generation rent a fighting chance of their own home is to tackle the root causes of our housing crisis by building the affordable homes we desperately need,’ said chief executive Campbell Robb. Mark Hayward, managing director, National Association of Estate Agents (NAEA), welcomed the policy on stamp duty for first time buyers, saying… Continue reading
New Scottish property tax rates being reviewed
The new property tax rates due to replace stamp duty in Scotland in April are being reviewed amid concerns that families buying in areas like Edinburgh face unfair bills. Finance Secretary John Swinney is currently examining the rates for the proposed Land and Business Transactions Tax (LBTT) and will announce his conclusions to the Scottish Parliament on Wednesday when MSPs are due to debate the Scottish Budget Bill. The LBTT rates were announced last year before the UK Chancellor George Osborne changed the stamp duty system nationwide. It raised the threshold for paying tax on a home from £125,000 to £135,000 but increased the amount to 10% on homes above £250,000 and up to £1 million. However, Osborne has now replaced the slab style stamp duty bands with a graduated rate which means some purchasers benefit more under the stamp duty system. Swinney said his proposals were designed for the Scottish market, not London house prices, with 90% of home buyers better or no worse off and 5,000 homes would be taken out of taxation all together. ‘The Chancellor's decision to introduce a new stamp duty system overnight, without warning and consultation, means that while 80% of home owners continue to pay less tax or no tax at all under the Scottish system we now have the opportunity to review the rates and ensure they are right for Scotland,’ he explained. The Conservatives have proposed that no tax be levied on house sales under £140,000, and that the 10% tax on homes between £250,000 and £500,000 be halved. ‘The eye watering 10% tax rate has caused concern in many parts of Scotland and is having a distortion on the housing market,’ said Conservative party finance spokesman Gavin Brown. Property industry experts have welcomed the move, saying that the original bands were too skewed towards extracting funds from the top end of the market. John Boyle, director of research and strategy at Rettie and Co, said that it was important that the Scottish government listened to people working in the industry and took their views on board. ‘We argued that the 80% Who would save money through what was proposed would save what amounted to a few hundred pounds, while the 20% who would pay more would be unfairly hit,’ he pointed out. ‘People in Edinburgh, Aberdeen and parts of Glasgow would all have been affected and it would have been a bit punitive on buyers in these areas. Trying to buy a family property in these cities for less than £250,000 is pretty difficult, and very few family homes sell for less than this,’ he added. One of the major complaints with the tax was the proposed jump from 2% on properties sold between £135,000 and £250,000 and a 10% rate on purchases above £250,000 and up to £1 million. ‘It would be reasonable to have a 5% or 7% bracket before you get to the 10% level, and we would expect this to be brought… Continue reading
Call for review of UK housing policy
The UK government needs to review its current housing policy and commit to a managed withdrawal of current property market support as a priority, according to the Intermediary Mortgage Lenders Association (IMLA). It has published its criteria for housing and mortgage policy pledges in the build-up to the 2015 election and says that with owner occupation set to fall from 64% to 59% in the next parliament, an ‘open and frank debate’ is needed about whether conservative lending benefits all. The IMLA argues that a clear overarching housing strategy is an essential requirement for the next government. This would replace a policy focus that has frequently favoured short term, eye catching and also conflicting measures over the last 30 years. As a result, successive governments have prioritised specific market segments at the expense of others rather than following a cohesive strategy across tenures and parliaments. In its paper UK Election 2015 – criteria for housing and mortgage policy pledges, IMLA also asserts that regulators’ response to the financial crisis and lenders’ responses to the new rules and their supervision have created a more conservative mortgage market. With owner-occupation set to fall from 64% to 59% over the next five years over the next parliament, the IMLA calls for the next government to ensure a more appropriate balance of choice and protection for consumers, in place of fragmented policies and regulatory interventions. The document sets out five specific requirements that should be tackled by the next government. These include establishing a programme for a properly managed withdrawal of government measures supporting the housing market and implementing a state or privately backed mortgage indemnity guarantee (MIG) to succeed Help to Buy and support high loan to value (LTV) borrowing in the long term. It also includes introducing measures to support downsizing by older households and increase liquidity in the housing market, carrying out a full review of the cumulative impact of regulatory changes for mortgage lending, including new capital adequacy requirements, macro-prudential rules and affordability assessments and engaging in an open discussion on the role of the sub-prime mortgage market in helping to meet consumer needs. ‘There are difficult and worsening housing problems across most of the UK, which mean the housing and mortgage markets will be a dominant issue in the 2015 election. A number of key agendas demand a response from politicians, and the consequences of their actions are likely to be felt for many generations to come,’ said Peter Williams, IMLA executive director. ‘We need to recognise that tenure patterns are changing and there is a wider diversity of housing needs in modern society than ever before. Home buyers face much greater challenges as a result of house price rises and financial services regulation. Private renters are confronted by high rental inflation and variable quality and social renting no longer provides an adequate safety net for those who cannot afford to house themselves via the market,’ he explained. He pointed out that a… Continue reading