7 May 2015 is a date that will be embedded upon the minds of many people who are looking to buy or sell property over the coming months, as housing pushes itself to the forefront of the main parties’ political manifestos.
It is no surprise that all the parties are making pledges around housing given the current climate of stricter mortgage lending criteria, high deposits and lack of affordable homes.
The uncertainty surrounding the election means a quieter period for the market as people seek clarity on which party is elected and what this may mean for them.
One thing is for certain though, and that is we need more homes!
The Conservatives have doubled their pledge to deliver discounted homes for first-time buyers under 40, with 200,000 new homes to be built.
Meanwhile, Labour want 200,000 new homes built a year by 2020 and the Liberal Democrats pledge to provide 300,000 new homes a year by 2020.
What isn’t clear though is exactly how the parties will achieve their goals. Interest rates are unlikely to stay as low as they are and it is important that once they do start to rise that this does not adversely affect the property market.
The two most widely debated initiatives which could have a significant impact on the property market are ‘mansion tax’ and ‘Help to Buy’.
The ‘mansion tax’ is a tax on all properties over £2 million which Labour want to introduce. The proposed tax would be imposed annually and would result in those property owners being charged from £3,000.00 to £19,000.00 for more expensive homes.
The difficulty here is that the chronic shortage in the current supply of housing and increasing demand means that some houses have involuntarily been pushed into a higher price bracket.
‘Help to Buy’ has allowed first time buyers to purchase a home up to the value of £600,000.00 with as little as a 5% deposit. However, the election will have a bearing on how this continues. The scheme could be reduced or even abandoned which would have a significant impact on the wider housing market.
It is understandable then that sellers and buyers may be tempted to hold back and wait until after the election before jumping into a sale or purchase of a property.
The post-election market however should bring with it more certainty and with George Osborne’s recent changes to the stamp duty system housing transactions are likely to increase.
For now though, we will need to wait and see what the election brings!