The Politics Of Housing
It is still generally acknowledged by all political parties that there is a housing shortage in the UK, and each political party wants to offer the public alternative methods of tackling the problem in an attempt to win electoral favour.
Most political parties see the housing crisis in the UK as a possible election winning issue and each party’s election manifesto promises the general public many things, including further private rented sector (PRS) reforms and the introduction of additional legislation. There isn’t much offered by any political party for landlords, except for the promise to put an end to the private rental sector.
A recent survey by Ipsos MORI research published in January 2015 discovered a confusing conundrum, in that:
- 75% of the public agree that there is a housing crisis in the UK
- 48% of the public disagree there is a housing crisis in their locality
The publication of each political party’s election manifesto is intended to give the public a clearer indication of the housing priorities of the UK’s next parliament.
However, despite claims of a housing shortage nationally there are still some UK regions that have large proportions of derelict and abandoned properties, many still in a habitable condition.In parts of the North East of England there are streets of empty and boarded up properties that would welcome any type of tenant, but it appears that no-one wants to live there. Those tenants that already live in these types of area are becoming disillusioned and angry due to the lack of development and investment in their localities, forcing even more to relocate exacerbating the problem.
Large scale industry has long since vanished from areas like Easington, Horden, and Peterlee in County Durham but there is housing available and plenty of it! However with street after street full of boarded up properties, there isn’t much hope for property investment except from naive uninitiated investors, who soon discover the drawbacks of owning property in the area.
Surely offering homeless families and migrants who are new to the country, housing in such neglected areas, would alleviate some of the current burden on the taxpayer and provide landlords with enough rental income to meet minimal operational costs.
Politicians from the main 5 political parties have already made a number of promises to the British public on housing in order to influence voter sentiment, which are set out below.
- No overall house building target has been stated but there are targets to
- Build 200,000 ‘Starter Homes’ within the term of the next parliament, specifically for first-time buyers under 40, to be sold at 20% below market value (BMV).
- Ensure that 90% of suitable brown field sites having planning permission for new housing by 2020
- The Help to Buy equity loan scheme, providing up to 20% equity loans to first-time buyers and home movers, will be extended until 2020.
- The introduction of a Help to Buy ISA which will contribute an additional 25% to any money saved for a deposit by a first time buyer, up to a maximum Government contribution of £3,000.
- Continued backing for the “Right-to-Buy” policy of allowing council tenants to buy their social housing property at a substantial discount.
- Promise to keep interest rates and mortgage payments low as a result of the continuing policy of deficit reduction measures.
Increasing Security For Private Rented Sector Tenants
- Avoid introducing as few new regulations as possible but continue to encourage landlords to voluntarily offer longer-term tenancies to tenants.
- Commitment to end retaliatory evictions for reporting rental property repair and maintenance issues to a landlord.
- Commitment to provide £400 Million (GBP) in low cost loans to build 10,000 Rent-to-Buy properties.
- Allocate approximately £750 Million (GBP) of the £100 Million (GBP) Build-to-Rent fund to build 10,000 new rental properties.
- Provide social tenants with a ‘right to move’ policy to give tenants reasonable priority if they need to move to another part of the country for work or an apprenticeship.
There are commitments to
- Preserve the green belt;
- Continue to promote neighbourhood plans as a way of involving local people in planning decisions.
- Support garden city design in locally-led developments
- Not to impose new towns on any part of the country
- Create New Homes Corporation to commission developers to build 200,000 new houses per year by 2020, funded by Government with private investment partners.
- Increase number of small and medium enterprises (SME) house builders through new ‘help-to-build’ scheme, with HM Treasury guaranteeing low cost bank lending.
- Introduce fast-track planning by local authorities on sites of less than 10 properties and include a higher proportion of smaller housing sites in their five-year land supply.
- Introduce Right To Grow for local authorities in order to develop new garden cities, garden suburbs and new towns, delivering up to 500,000 residential properties, if the local authority has a housing need but are unable to meet criteria within their own boundaries.
- Double the number of first-time buyers by 2025.
- Make local authorities give preference to first-time buyers from the local area for new build housing sites.
- Introduce a national register of landlords;
- Ban letting agents from charging fees to tenants
- Introduce new legislation to make three-year tenancy agreements standard practice, with a ceiling on rent rises throughout the period of the tenancy.
Welfare and Taxation
- Repeal bedroom tax legislation for social housing (under-occupation deduction from Housing Benefit for social tenants)
- Introduce Mansion Tax for properties valued at over £2 Million (GBP
- Allow local authorities new powers to charge double Council Tax on properties that are empty for more than a year.
- Build 300,000 new properties per year by the end of the next parliament
- Create at least ten garden cities where there is clear local support and private sector appetite
- Establish Housing investment bank.
- Increase local authority responsibility for allocation of land to meet 15 year housing needs through increased use of Local Housing Companies, allowing local authorities to invest outside of their Housing Revenue Accounts.
- Designate 30,000 new properties as Rent-to-Own by 2020. Tenant rent payments used to build up ownership of the property over 30 year period.
- Change the policy on Right-to-Buy, allowing local authorities to suspend the scheme in their area if they so wished.
- Introduce new three-year tenancy agreements through encouragement rather than legislation.
- Reduce landlord maintenance responsibilities in return for lower rents.
- Introduce new energy efficiency standards for private rented sector properties.
- Introduce incentives for housing associations to split under occupied properties
(i.e Divide into flats to prevent under-occupation).
- Promote tenant management in social housing.
Welfare And Taxation
- Reform bedroom tax policy by removing subsidy for new tenants in social housing. Existing social tenants not subject to housing benefit deductions until in receipt of a reasonable offer of alternative social rented accommodation with the correct number of bedrooms.
- Tenants who need an extra bedroom for genuine medical reasons or whose homes are substantially adapted will not have their housing benefit reduced.
- Introduce a mansion tax on homes worth over £2 Million (GBP).
- Introduce annual Land Value Tax for property owners.
UKIP have yet to produce policy documents on housing, but have outlined some of the party’s housing priorities.
- Build 1 Million properties on brown field sites by 2025 using:
- Brownfield bonds;
- Brownfield decontamination assessment grants
- Removing stamp duty from brown field first builds
- Removing VAT from brown field conversion costs
- Establishment of a UK Brown field Agency to collate data for a national register.
- Remove requirement for planning permission for large-scale developments through referendum which can be triggered by 5% of local electors within three months.
- Remove Right-to-Buy from foreign nationals, except for ex-servicemen.
- Bring 700,000 empty properties back into use as affordable housing
- Introduce duty of care for local authorities to provide housing to any ex-serviceperson in need.
- Achieve stronger local connections in social sector where social housing priority will depend on a parent or grandparent having been born in the area.
- Reform leasehold law to make it easier for leaseholders to extend property leases and challenge service charges.
- Introduce medium-hold lease for tenants for between three and five years.
Welfare And Taxation
- Repeal bedroom tax under-occupation deductions from Housing Benefit
- Pay Local Housing Allowance directly to landlords rather than tenants.
- Improve health and support services for the homeless
Only announced house building targets specifically related to social housing
- Build 500,000 new social sector properties by 2020
(funded through direct Government grant paid for by removal of the mortgage relief for buy-to-let landlords).
- Remove the borrowing cap on local authorities funding an estimated 60,000 extra residential properties.
- Central Government to assimilate social housing debt
- Remove right for local authorities to classify people as intentionally homeless
- Break up larger housing associations and promote housing co-operatives.
- Improve property standards for accessibility, space and facilities, ergonomics, sound and thermal insulation, and energy efficiency (applied retrospectively where practicable to existing properties).
- Require independent environmental impact assessments for large scale property developments and developments on green field sites.
- Encourage more property self-build schemes, with unemployed people permitted to work on such schemes without the risk of benefit sanctions.
- End the existing Right-to-Buy and tenant discount on social housing
- Allow individual local authorities to decide which, if any, properties should be sold
- Introduce a ‘Right-to-Rent’ policy, with property owners threatened by repossession gaining the right to transfer the property to local authority ownership below market value (BMV) but then remain in the property as council tenants.
- Control private rental sector rental prices through the establishment of a living rent commission to set voluntary living rental prices.
- Commitment to cap PRS rent rises at the rate of inflation.
- Compulsory registration of all private rental sector rental prices
- Phase out 6 month assured short-hold tenancies (AST) and replace with more stable, assured tenancies.
- Protect the civil liberties of tenants in rental properties giving them the right to keep pets and make environmental modifications such as the installation of solar panels.
Welfare And Taxation
- Commit to long-term policy to replace all benefits, including Housing Benefit, with a £72 (GBP) per week citizen’s income.
- Introduce a means-tested, regional Housing Benefit payment related to rent payments and mortgage repayments.
- Increase Council Tax for empty properties
- Introduce new Council Tax bands above band H for higher value properties
- Provide one-off grants for homeless people to move into unfurnished homes
- Provide insulation grants for low-income households
- Scrap mortgage interest tax allowance for buy-to-let mortgage holders
- Phase out Council Tax in favour of a Land Value Tax
- Remove bedroom tax from Housing Benefits
Landlords are the target for all political parties at this general election, and depending on who gets into power, there could well be a mass exodus on the cards which would certainly throw the whole of the private rental sector into disarray.
There isn’t a single political party who have the interests of business at heart despite all the election promises.
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