The Conservative Party has unveiled a raft of measures to deliver more new homes and enable more first time buyers to get a foot on the housing ladder in its election manifesto.
In addition to the reintroduction of a “new and improved” ‘Help to Buy’ scheme and the permanent abolition of stamp duty for first time buyers on homes of up to £425,000, the party has also pledged to deliver 1.6 million new homes over the next five years by increasing development on brownfield sites.
Prime minister Rishi Sunak said the Conservative Party would also continue its mortgage guarantee scheme, ban no-fault evictions and stop landlords from having to pay capital gains tax when selling properties to tenants.
He also pledged to abolish nutrient neutrality rules, which many experts believe are holding back the delivery of new homes.
Industry reaction:
Justin Young, CEO, RICS
“Having delivered only 2.5 million homes over the last 14 years, the Conservative Party has made an ambitious pledge to build 1.6 million homes over the next five years. That is over 300,000 new homes a year – which hasn’t been achieved since the sixties, a period during which the public sector and SME housebuilders had a far greater role in housing delivery. While it’s encouraging to see the Conservatives committing themselves to supporting small builders, this will not address the quagmire of laws that make up Britain’s restrictive and politically permeated planning system.
“We welcome any initiative that helps first-time buyers, but demand-side solutions must be combined with workable supply-side solutions. To begin improving affordability levels the UK must build more housing; there is currently a shortfall of 4.3 million homes in the UK by some estimates [Centre for Cities study].
“While a stamp duty cut would help in the short-term by enabling more buyers onto the first rung of the property ladder, it’s vital that we learn lessons from the past and introduce policies that address the plethora of structural issues that exist within house building. Supply must be addressed across all tenures, otherwise with Help to Buy 2.0 we risk a repeat of the negatives of the first scheme. While it did provide support for first time buyers, and gave confidence to housebuilders, it also inflated house prices across England, left thousands of buyers at risk of negative equity and failed to deliver good value for money for the taxpayer.”
Melanie Leech, chief executive, British Property Federation
“We have a housing emergency and it is positive to see a commitment to 1.6m new homes over the next Parliament, which needs to be translated into a clear target. Importantly this includes explicit support for different forms of housing, particularly homes for older people. Our manifesto, ‘Building our Future’ sets out how we think half a million bedrooms could be released back into the market by 2030 by boosting the supply of older people’s housing that better meets the needs of the UK’s growing elderly population.
“While the abolition of stamp duty up to £425,000 and a new Help to Buy scheme will help affordability for some, we need a clear plan on how supply will be increased across all tenures and the whole country over and above building in the inner cities. That needs reconciling with the ‘cast iron’ protection for green belt land, which we believe unnecessarily limits the scope to build on previously-developed and well-connected parts of it.
“We support the approach to renters’ reform. It is really important that abolition of s21 is done thoughtfully, accompanied by court reform, to maintain investment in the sector. On leasehold reform, we worry that broad political statements do not match the practicalities of delivery. You can only move away from leasehold if there is a working alternative. Capping ground rents in such a broad-brush way is fraught with consequences that impact on leaseholders and freeholders.
“From a commercial perspective, the proposal to shift some of the burden of business rates onto warehouses misses the point, which is that the overall burden of business rates is simply too high for everyone. Alongside a reduction in the rate, what we need is more frequent revaluations to ensure that rates bills better track property values, and to de-couple business rates from inflation to make the tax more sustainable.”
Paul Rickard, managing director, Pocket Living
“While we obviously welcome the commitment to re-introducing a Help to Buy scheme, increasing the stamp duty threshold to £425,000 for first-time buyers and delivering 1.6 million new homes, we were hoping for a suite of bolder and more ambitious policies to tackle the root cause of the housing crisis – the shortage of supply. Our planning system needs urgent intervention and resourcing, especially with regards to streamlining the process for unlocking small brownfield sites.
“Our SME housebuilders have never been fewer in number than they are today. Our ability to build new homes and the supporting infrastructure has never been under greater strain. The next government, whichever party it is comprised of, needs to work with the industry to urgently address these issues with a serious package of bold, radical and ambitious policies backed by the drive to see them through.”
Mat Shenton, head of new homes, Rapleys
“It is positive news that the Conservatives want to give first time buyers a helping hand and, as they are usually the lifeblood of the market, this should stimulate transactions further up the ownership chain. Generally speaking, it’s so important to try and get some confidence back in the market to drive activity. However, when it comes to the new scheme, much more info is needed as so far it’s been called a new and improved version of previous schemes and it’s difficult to see what’s different.
“If it is a flat % rate or not geographically spread on values depending on location, then you would presume that the effect will be less in London and the South-East. If it is practical and can be rolled out quickly with clear guidance, together with getting a control of the interest rates and some stimulus via SDLT, then I really think they would be giving the market a huge leg up. However, I suspect that most will be eagerly awaiting Labour’s manifesto to see how they expect to deliver their ambitious housing targets too because at the moment the headlines are good, but the detail is missing.”
Terry Woodley, MD of development finance, Shawbrook
“The Conservative’s proposed plans to build 1.6 million new homes in the next five years by increasing development on brownfield sites could be a step in the right direction. The UK is in urgent need of solutions to address the housing shortages, and developing brownfield sites could be an effective piece to the puzzle.
“However, it is not the sole solution and it can come with its challenges. Though our research shows that 77% of developers agree that location is still the biggest driver of property sales and brownfield sites allow for attractive urban living options, the sites can often pose a unique set of challenges and may not be as attractive to developers compared to other options.
“Whilst this could be a positive change, any government considering these steps must ensure that they’re taking a multi-pronged approach to adequately tackling housing issues if we are to see real progress over the next 12 months and beyond.
Sav Patel, associate director, Lanpro Services
“The Conservative manifesto for this election has a high headline figure for housebuilding: 1.6 million homes over the term of the parliament, or 320,000 homes per year – representing a significant increase on the million homes built over the current parliament. However, the mechanisms set out to achieve this are unbalanced. There is an emphasis on major urban areas, with faster planning permissions for brownfield sites, higher densities in London and more urban development corporations. Bringing forward this type of development is often complex and lengthy. There is no encouragement for higher delivery rates in the rest of the country.
“Meanwhile, the Conservatives are offering a ‘cast-iron’ protection for the green belt, which stands in contrast to Labour’s proposed review of green belt policy. There are some welcome detailed policies. The manifesto suggests ‘abolishing’ nutrient neutrality rules, to be replaced by a ‘one-off mitigation fee’ for each development. And there is support for small builders, with a new type of allocation for land for them as well as further exceptions from Section 106 obligations.”
Dominic Agace, chief executive, Winkworth
“A return to Help to Buy is to be welcome to give house builders the certainty to direct their developments to meet the needs of first time buyers, whilst also allowing those that are struggling to save a deposit but can meet affordability criteria to own their own home in the same way first time buyers who required smaller deposits in the past were able to. More development of first time buyers’ homes will also keep a lid on price rises going forward as supply meets the demand.
“Landlords being capital gains free to tenants seems to be a potentially disastrous move. as we could see it drive landlords to sell out and put significant pressure on renters as supply disappears with long term landlords cashing in. We’ve just seen the impact such measures can have in stirring mass action with the recent stamp duty holiday. This could have grave consequences for renters as we aren’t seeing many new BTL investors these days to replace the ones that leave. We do need a private rental sector if we want our cities to accommodate young professionals who are so important to the success of our cities which are ultimately drivers of UK GDP growth.”
Karen Charles, executive director, Boyer
“Whilst no-one will dispute that development should be directed to urban brownfield sites first, the reality is that there is also a need and demand for homes in less urban locations, which often requires development on undeveloped greenfield sites as brownfield sites are unavailable. Indeed, if the prime minister is going to achieve the increase in housebuilding as set out in the manifesto, then the government will need to reform the planning system and relax some planning restrictions which make it so time-consuming to prepare development plans, and so difficult to secure planning permission and deliver new homes in locations where people really want to live. The Conservative Party manifesto on planning and housing is commendable, but all indications are that the constraints to housing delivery particularly houses outside less urban areas, by the apparent sole focus on delivering homes on brownfield sites in urban locations, will continue.”
Colin Brown, head of planning and development, Carter Jonas
“The Conservatives have pledged a record increase in the number of homes delivered each year on brownfield land in urban areas. The notion that brownfield site is a ‘fix’ to the housing needs of the UK and that a fast-track scheme can turn the dial is, in our view, somewhat misplaced. There is already a vast amount of denser development being delivered on brownfield sites in our larger cities and while this will provide a meaningful contribution to housing delivery, we would suggest that 320,000 homes per annum will require multiple interventions by government.”
