With the general election this week, we’re taking a look at the three main parties’ housing proposals. All are promising initiatives to alleviate pressure on prices, although whether any will be enough to address the fundamental imbalance between supply and demand remains to be seen. This shortage of supply, especially in London and the South East has fuelled the dramatic house price growth over the last twenty years, especially in London.

Perhaps what is needed is for the position of housing minister to return to being a cabinet post with its own department, as it was from 1951-1970 (the Ministry of Local Government and Housing), rather than being part of Communities and Local Government as it is today. Although we are unlikely to see a return to the large-scale government house building programmes of the post-war period, giving the housing minister a seat at the cabinet table would indicate a commitment to resolving what is generally accepted is a ‘broken’ housing market.

The parties’ main proposals are:

Conservative

  • Stabilise house prices by building 1.5m new homes by 2022
  • Reform Compulsory Purchase Orders (CPO’s), to allow councils better access to land that could be built on
  • Encourage landlords to offer long tenancies as standard & increase security of tenure for “good tenants”
  • Provide funding to selected “ambitious, pro-development councils” to build council housing stock
  • Give housing associations greater flexibility to increase their housing stock

Labour

  • Build 1m homes by the end of the parliament, through a newly established Department for Housing
  • Guarantee the funding for the Help to Buy scheme – which ended in 2016 – until 2027
  • Make three-year tenancies “the norm”
  • Build 100,000 new council homes and Housing Association homes across the UK
  • Cap rent rises at the rate of inflation

Liberal Democrats

  • Build 300,000 homes a year by the end of their term, in part by allowing councils & Housing Associations to borrow more
  • Create £5bn of funding through a newly set up British Housing and Infrastructure Development Bank
  • Give local authorities the power to fine those holding onto land that could be built on
  • Promote longer tenancies with an inflation-linked annual rent increase
  • Introduce a Help to Rent scheme to provide loans to help first-time renters under 30 with a deposit
  • Ban lettings fees for students

Head of Research Nicola Almond comments on the surprise election on 8 June

Today MPs backed Theresa May’s call for a general election on 8 June. Theresa May appealed to the British public to ‘put their trust’ in her, and to provide a firm mandate to create unity in Westminster in order to deliver Brexit.

Theresa May previously said she wouldn’t call a snap election, but with a working majority of only 17, and polls showing an increasing lead over Labour, the temptation proved too great. The latest YouGov poll gives the Tories 44% of the popular vote – almost double Labour’s 23%. The result of the election is therefore fairly predictable, and some commentators are predicting that the Conservative majority will increase to 100 seats.

The most obvious outcome of the likely substantial Conservative win would be to improve dramatically May’s room for manoeuvre in the Commons and to strengthen her hand in Europe. The absence of an election looming in 2020 (soon after the March 2019 Brexit deadline) will also provide greater stability.

On balance, this unexpected early election is forecast to be positive for the sterling and the economy, providing a government which is stronger and in a much better to position to negotiate the best Brexit deal for the country.

In the context of increasing global destabilisation, we expect London property to remain a safe haven for investors, despite some appreciation in the pound.

CEO Anne Currell says ‘A stronger government operating from a united position of strength can only be good for the economy and the property market’.