October 10, 2017
Party conferences, housing consultations and 300,000 new homes
Politics has been back on the agenda in recent weeks, with party conference season, the latest round of Brexit negotiations, a government consultation on the home buying and selling process and calls from a senior minister for more decisive action to up housebuilding levels in Britain.
This month’s round-up, then, has a distinctly political flavour to it. Below, we take a closer look at what’s been happening in the world of property during October.
Conference season springs a few surprises
At the Conservative Party’s conference in Manchester there were a number of announcements made regarding housing and property.
In a move that surprised many, Theresa May announced that the government would build a new generation of council houses, offering councils and housing associations an extra £2 billion in funding to build 25,000 homes for social rent by 2021.
This led to criticism from opposition parties and housing charities that 5,000 homes a year between now and 2021 is a ‘mere drop in the ocean’ when demand is factored in.
The Tories also announced a fresh cash injection for Help to Buy, with a £10 billion boost for the flagship scheme first introduced in December 2013. The aim is to help a further 135,000 buyers to take their first steps on the property ladder.
Details on where this extra funding will come from was thin on the ground, but May insists all will become clear at the Budget on November 22.
As well as council homes and Help to Buy, the government also used the conference to announce a range of measures affecting the private rented sector, including incentivising landlords to offer longer-term tenancies, plans to regulate all letting agents, and changing the law to make membership of an official redress scheme compulsory for all private landlords.
Meanwhile, over at Labour’s party conference in Brighton, Jeremy Corbyn also used his speech to announce a range of policy proposals on housing. If Labour came to power rent controls would be introduced in some British cities for the first time since 1988.
Rather than setting rents at lower levels – which could see a mass exodus of landlords from the market or underinvestment in rental stock – there would likely be a cap on rental increases. Three-year tenancies would also become the norm to offer greater security to tenants.
Corbyn also announced plans to guarantee homes for existing tenants on redeveloped estates. Labour said those living on redeveloped estate must be offered a home on the same site and the same terms as before.
There would also be plans to end the freeze on housing benefit, tax land-hoarding developers and give extra powers to local authorities to compulsorily purchase undeveloped or empty sites.
Government calls for evidence
At 12am on Sunday October 22 the government launched a consultation into the home buying and selling process, calling for evidence on how to make the process smoother, less stressful, cheaper and faster for those involved.
While the timing of the announcement was strange, the subject of the consultation itself was also a surprise to many. Communities Secretary Sajid Javid, whose department is overseeing the consultation, said he was eager to hear the opinions of everyone involved in the home buying process – including estate agents, solicitors and mortgage lenders.
He said the government was keen to address issues across the whole sector, from the controversial practice of gazumping to ways of reducing time wasting and sales being held up by unnecessary delays.
The best ways of building trust and confidence between buyers and sellers will also be looked at, while the government also wants information on how better guidance can be created for the parties involved in a housing transaction.
Innovation – in particular innovative digital solutions to speed up the buying process – is being called for to help ‘everyone have a good quality home they can afford’. Javid believes improving the process of buying and selling is part of delivering that.
“Buying a home is one of life’s largest investments, so if it goes wrong it can be costly,” he said. “That’s why we’re determined to take action to make the process cheaper, faster and less stressful.”
The consultation is due to run for eight weeks and will close shortly before Christmas.
Borrowing to invest
Sajid Javid has been a busy man of late, addressing the Tory Party conference in Manchester, launching a consultation on behalf of the Department for Local Government and Communities and, on Sunday, appearing on The Andrew Marr Show to urge the government to borrow money to fund extra housebuilding across the country. He said the government should be taking advantage of historically low interest rates to build between 275,000 and 300,000 homes a year in England alone.
The current target is 250,000 a year and the government is failing to meet that, so some are sceptical about such a pledge. The rates of housebuilding Javid is talking about were last seen in the 1960s and it would take a dramatic shift in planning and construction to make it possible.
It’s well known that supply is failing to keep up with demand and successive governments have failed to build enough new homes, with Theresa May recently describing the housing market as ‘broken’. Critics, though, will want to see bold pledges backed up with bold action if they are to be convinced that the current supply-demand imbalance will be resolved.
For more help and advice on buying or selling a home in London, please get in touch with Atkinson McLeod.
To find out how much your home could be worth in the current marketplace, you can request a free and instant online valuation.