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By Milton Rodosthenous

Director, LetsBid

OTHER FEATURES

Election preview - what are the key issues for agents?

In just over two weeks, the UK population will head to the polls for the fourth general election since 2010.

Of course, this election comes in unusual circumstances. It was called by Boris Johnson in a bid to rebuild a Conservative majority in order to push through his Brexit deal at the end of January.

Johnson's main opposition comes from Jeremy Corbyn and the Labour Party, with a resurgent Liberal Democrats and the Brexit Party battling it out for minor honours, while the Scottish National Party could hold the balance of power in a hung Parliament.

A second general election in just over two years and the first December general election since 1923, the vote's outcome will no doubt have an impact on the property market with the likelihood of another new housing minister and a range of fresh policies for the industry to digest.

Now that all the parties have launched their official manifestos, it's time to look some of the main housing policies being put forward by the two main parties and the key election issues for estate agents.

The Conservative Party – long-term mortgages and stamp duty

The housing section of the Conservative manifesto - released on Sunday November 24 - says it aims to help people to buy and rent effectively.

With this in mind, one of its main proposed policies is to introduce long-term fixed rate mortgages to help lower the cost of deposits for first-time buyers.

It's unlikely anyone would argue too strongly against this initiative and it could potentially be more effective in helping first-time buyers than the Help to Buy and Shared Ownership schemes which both have their detractors.

The manifesto has also confirmed that the stamp duty surcharge on non-UK resident property buyers will be set at 3%.

Setting the rate this high could be risky and deter investment into the UK market, particularly in prime London. However, this policy could be seen as another boon for domestic buyers and first-time purchasers.

There was an expectation that Boris Johnson would put forward some sort of reform of the current stamp duty system, either for domestic buyers or second property owners.

The fact that no proposals of this nature have been forthcoming does represent a climb down from Johnson and his chancellor Sajid Javid, who have both hinted that stamp duty reform was a priority since the summer.

Changes to the stamp duty system could help to reinvigorate the buy-to-let market or build confidence among home buyers and sellers, but with the clear focus on lowering barriers to entry for first-time buyers – who already benefit from favourable stamp duty rates – it’s perhaps not surprising that the existing stamp duty system is being left alone for now.

The Conservatives have outlined ambitious plans for new homes, reiterating the policy to build 300,000 homes a year by the mid-2020s. If achieved, this could see more than a million new homes in the market, something which would certainly have a positive impact on transactions and alleviate the supply problem.

The Conservatives’ rental sector focus revolves around providing tenants with a ‘better deal’ and the controversial move to abolish Section 21 evictions. It’s well-documented that the courts repossession process needs reforming as it is too slow and cumbersome at present. However, any action taken would need to ensure both landlords and tenants are provided with the necessary protection.

Meanwhile, a Conservative victory next month would hopefully see the Ministry of Housing, Communities and Local Government continue its good work on reforming the homebuying and selling process, which will be crucial in speeding up transactions and making moving home more efficient and appealing for all demographics.

The Labour Party – PRS focus and affordable housebuilding

Taking a different approach to the Conservatives, the Labour Party has put reform of the private rental sector (PRS) at the heart of its manifesto.

Alongside rent controls, Jeremy Corbyn's party has pledged to end the Right to Rent scheme, introduce open-ended tenancies and implement a nationwide licensing scheme.

The proposals and particularly rent controls have come in for widespread criticism from the property industry. And when you consider past examples of rent controls in the UK and across Europe, it's not hard to see why they're not universally popular.

The Labour Party must be cautious of discouraging people from investing in the PRS and indeed encouraging existing landlords to sell up and exit the market. Landlords have had to endure many changes to the market in recent years and while making things fairer for tenants is important, it should not be to the long-term detriment of property investors.

When it comes to new homes, Labour's emphasis is on providing affordable council and social homes, which again could help to reduce the pressure on the supply of homes across the country.

Unlike the Conservatives, Labour has decided not to take any stamp duty action, while it also seems happy to put its faith in the Help to Buy scheme to help first-time buyers on to the property ladder.

Agents to focus on business as usual

For estate and letting agents, whatever the result of the election, it will remain important to take a business as usual approach, which has been required for some time now.

From January, we expect to see the introduction of a pilot for mandatory reservations agreements and see more details about plans to regulate property agents, both of which could help to contribute towards a more professional and efficient moving process in the future.

In the meantime, as we enter a busy period for the property market, agents can help consumers by providing them with a variety of buying and selling options, expert market advice and guidance on how their decisions will be affected by the current political climate.

In 2020, we hope that a more stable government, combined with a resolution to Brexit, should help to kickstart the market and encourage large numbers of people to start buying and selling again.

*Milton Rodosthenous is director of LetsBid Property

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