How the general election might affect the housing market

Confused about what might happen to the housing market following the general election?

With housing high on the agenda for every Party, could it mean significant changes or continuum of the same old same old?

With Rishi Sunak making the groundbreaking comment that buying your own home has “got harder” it is not a surprise he is getting criticism for stating the obvious.

The average house price across Britain is now a whopping £340,837 according to property firm Savills. The minimum deposit for this would be £17,042, then potentially stamp duty or land tax on top of this, not to mention legal fees, has priced many people out. This, together with, rents being higher than ever it is making it impossible for families to save.
What pledges have been made? I have picked some key points below.

Conservatives:

• Build 1.6 million new homes in England this would mainly be on brownfield land.
• Renew the Affordable Homes Programme, i.e. Help to Buy which allows first-time buyers to get a government equity loan worth up to 20% to buy a new build property.
• Make permanent the increase to the threshold at which first-time buyers pay stamp duty to £425,000 (currently in England only).

Labour:

• Build 1.5 million new homes on brownfield and grey belt land.
• Make the Mortgage Guarantee Scheme permanent – this has so far accounted for 1.3% of all residential mortgage completions since 2021*. This means lenders are more willing to offer 5% mortgage deals.

Lib Dems

• Build 1.9 million new homes* of which 150,000 would be social homes, including 10 new garden cities, ensuring that all new homes are energy efficient and built to a net zero standard.

In my opinion none of these changes are particularly radical and I am very cynical about any pledges to build houses. The schemes lenders are currently offering are much more relevant to help first time buyers.

• One lender offers a “Helping Hand” to first time buyers and can lend up to 20% more for first time buyers.
• Another lender will accept personal loans as a deposit, as long as it fits with affordability.
• All sorts of safety nets available for those parents/grandparents etc. wanting to gift deposits, i.e. trusts, second charges etc. that can give that extra level of security to the banks of parents.

Of course, it is not just first-time buyers that need help. The whole market and the cost of living including the eye watering cost of renting needs to be addressed. Will there be any emergency rate cuts before the election? With the next meeting on the 20th June, watch this space.

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