What would a Conservative government mean for north London property?
PUBLISHED: 10:38 05 May 2015 | UPDATED: 10:38 05 May 2015
The central thrust of Conservative housing policy is aimed at building more homes, which is to be commended. As I have said in previous articles the root of our housing problems emanates from a lack of supply, because not enough homes have or are being built.
The Conservatives ‘Starter Home Scheme’ will aim to make more than 200,000 new homes available to first time buyers. At the heart of the initiative is a change to the planning system which will encourage builders to develop brownfield sites that are currently under used or unviable. Currently a builder will pay tens of thousands of pounds towards infrastructure and providing social or affordable housing as part of a development, in many cases this can make a development impractical and unaffordable. Under proposals put forward by the Tories, developers will be exempt from Section 106 charges and community infrastructure levies in return for offering homes at a 20% discount exclusively to first time buyers under the age of 40.
In another attempt to bring forward building opportunities a London Land Commission will be set up to identify and release public owned land which is currently under used or derelict. Local authorities will also be asked to allocate land for individual building plots to encourage self-builders.
The Help to buy equity scheme which was first introduced in April 2013 and they have announced in their manifesto that this will be extended up to 2020. Under the scheme the Government lends a buyer of a new build home up to 20% of the value leaving the buyer to find 5% as a deposit and the remaining 75% Mortgage, this extension will add certainty and consistency to the market for house-builders which will encourage them to build more new homes.
Another of their proposals will see Local Authorities being required to sell their most expensive council homes as and when they become vacant. They will then be required to replace the property with a more affordable home on a one to one basis. Part of the money raised from the sale will be put towards a £1 billion fund which will allow local authorities to bid for cash to help them clean up derelict brownfield land for development. The Conservatives hope this will lead to nearly 400,000 homes to be built by 2020.
One of the main policies proposed by the Conservatives is a change in the inheritance tax rules. Currently 40% tax is payable on an estate in excess of £325,000 per person. The Tories plan to introduce a ‘family home allowance’ which will add a further £175,000 to the existing threshold. This will allow people after their death to pass property on to children tax-free up to the value of £500,000. The full amount would benefit existing widows and widowers as it is transferable even if one spouse had died before the policy comes into effect, bringing the total transferable tax-free allowance from both parents in a married couple or civil partnership to £1m.
The proposal which has grabbed most headlines is the extension of the ‘right to buy’ scheme to include housing association property. Right to buy was first introduced by Margret Thatcher in 1980. Since then nearly 1.9 million council homes have been sold. Extending the right to housing association tenants could see thousands taking advantage of the discounts which will be capped at £102,700 in London (£77,000 for the rest of England). While I believe the principle of home ownership is paramount and must be encouraged wherever possible, those living in housing association property are already in good secure homes at reasonable rents, I don’t see this policy benefiting the people who most need it.
Over the past decades Governments of all persuasions have buried their heads in the sand rather than facing the serious challenge of building the number of new homes needed to meet the ever growing demand. While each of the main parties is offering a commitment to build more homes, these promises must be followed through with positive action whichever party takes control on 8th May.