What a Conservative win means for the property sector.
As I write this blog, the Conservatives have won a majority seating in Parliament. As a recruiter entrenched in this sector I have followed the election campaign trying to build a view of what will happen to the sector after the 7th May. Housing policy was definitely used in the ground war to secure seats so what assumptions can we make within the sector based on a Conservative Parliament? The theme of Property Ownership, liberating the renter and low taxation has been the Conservative rhetoric.
Help 2 Buy will be continued and should fuel more development of housing of which the Tories have promised 275,000 homes by 2020. To be able to deliver this promise the Tories will look to relax the planning laws and give the cities more power over their Development programs and property taxes such as Stamp Duty. Boris will bang the drum on making Housing financing easier and will push his local authorities to use it or lose it with land.
Renting will change and could likely be awarded on turning social tenancies to affordable rent and this would allow landlords the ability to charge up to 80% of market rate. This uplift will inevitably help Landlords to fund Housing Development programmes. There is always two sides to this coin as smaller housing associations who are unable to convert to an affordable rent model and no longer supported by grants will focus on managing and investing in their current stock. The drive for affordable homes will mean Housing Associations have the ability to sell more of their stock instead of having to relet, creating capital that can be reinvested into housing programmes. The Right to Buy mandate will also tie in with this ability to release capital and create home ownership.
In conclusion, the Conservative motto of “Buying a home shouldn’t be an impossible dream” will mean that Housing Associations are given more power but also more scrutiny. Welfare reform Minister Lord Freud summed it up when he said “the sector will have to be more nimble on its feet” and sleeper Housing Associations will have to wake up and, excuse the pun, get their house in order. A conservative government could really shake the sector up and we will see a competitive environment that will allow Housing Associations to become some of the UK’s biggest property funds if not in Europe
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