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What brokers want to see in election manifestos – analysis
More housebuilding, planning and stamp duty reform, revived EPC legislation and a buy-to-let (BTL) tax review are just a few policy suggestions from mortgage brokers for the upcoming election.
Prime Minister Rishi Sunak confirmed two weeks ago that a general election will take place on 4 July, to the surprise of many brokers and lenders.
Rumours have started circulating about policies in the lead-up to the election, with the Conservatives looking at changing the law around evictions and Labour noting a plan to build one-and-a-half million homes.
So, we asked a variety of brokers what policies they want to see for the housing and mortgage sector.
Stamp duty reform and EPC legislation could be key for election
Sally Mitchell, senior mortgage broker at The Mortgage Mum, said that housing policy and the cost of mortgages and rent will be “really important” for the electorate, as many people have been impacted by higher interest rates, which would not change until the base rate is lowered.
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She said: “In terms of what I would like to see in an election manifesto, some reform of the stamp duty system and clearer direction on EPC policy, please.
“The current stamp duty tariff does not encourage people to move and is unfair to many first-time buyers, as it does not reflect the geographical differences in house prices. Without the entry into the market at this level, the whole system comes to a halt.”
Mitchell said that a good move would be for stamp duty bands to reflect average house prices, and an increase of the threshold at which buyers pay. Stamp duty for downsizers should also be removed.
“The EPC question needs some serious work, and I don’t underestimate the issues involved. However, if we are to even approach our net zero target, whoever comes into government needs to launch a programme that is achievable and fair to all parties with financial support or incentives where necessary,” she added.
Jonathan Bone, mortgage lead at Better, said a good move would be to retain the stamp duty nil-rate threshold beyond 2025, noting that many people do not realise that it ends on 31 March next year, and if mortgage rates fall, this could “catch some buyers out”.
Housebuilding and planning reform should be on cards for election
Justin Moy, managing director at EHF Mortgages, agreed that housing has “no choice” but to be a “main priority” for all parties and has been “underinvested [in] for way too long”.
He said: “One of the easiest solutions is to ensure all new developments have a higher percentage of smaller ‘starter’ homes, such as one- and two-bedroom homes.
“So many developments seem to start with three-bedroom properties as their smallest, immediately pricing many of the first-time buyers out of ownership. We don’t need new-build schemes like Help to Buy, just sensible borrowing options and more affordable properties to buy.”
Kundan Bhaduri, property development and portfolio landlord at The Kushman Group, said election manifestos needed to consider “affordability, availability, and sustainability”.
He said that both parties acknowledged that building more homes was a “necessity” and called for the reinstatement of mandatory housing targets.
“Streamlining planning processes and incentivising developers to build in underutilised areas will significantly boost supply. The tenant charter and the idea of removing no-fault eviction is controversial at best,” Bhaduri added.
He noted that Labour was emphasising “comprehensive reforms to increase supply and protections”, potentially putting pressure on the Conservatives to “bolster their housing policies to resonate with voters”.
Kasia Makarewicz, senior mortgage and protection adviser at ClearView Mortgages, said: “Both parties are expected to propose significant investments in affordable housing. This could include subsidies for low-income families, incentives for developers to build affordable units, and expansion of social housing programmes.”
Makarewicz noted that, on the sustainable housing development side, policies could include green building practices and support for energy-efficient home renovations.
Bone agreed that the government needs to build more houses, adding that he wanted to see a “more aggressive approach to Nimbyism”.
Nick Mendes, mortgage technical manager at John Charcol, said the government should look at making it easier for local authorities and housing associations to “borrow money specifically for new housing projects”.
Help to Buy ISA reform and better support for FTBs needed
Mendes said that amending the terms of Help to Buy ISA and Lifetime ISA (LISA) to increase the maximum purchase price to £600,000 could be a beneficial policy move.
Bone agreed that reform of Help to Buy ISA was needed, suggesting that creating a scheme that was “salary-fed” and money was taken pre-tax could be an attractive offering.
Mendes added that the government should “lean on” the Prudential Regulatory Authority (PRA) to exclude fixed rate mortgages of at least 10 years from the income multiple cap where no more than 15% of mortgages can be on a multiple of more than 4.49x income.
He also called for parts of the Leasehold Reform Bill, which became law last week, to be reinstated.
Makarewicz added that policies to help first-time buyers, such as tax incentives, grants, or low-interest loans, are likely to be “key components of party platforms”.
BTL tax re-examination wanted
Bone said that the prospective government should re-examine how landlords are taxed.
“The squeeze on landlords may drive rents up as fewer properties become available, and, as landlords struggle, they will invest less money into properties, and housing conditions will [get] worse,” he said.
In 2015, the government limited mortgage interest tax relief to landlords, leading many to create limited companies as this relief could still be claimed.
There have also been some changes to stamp duty, restriction of private residence relief, corporation tax changes and new rules for letting relief.
Multiple dwellings relief has also been removed, and the Furnished Holiday Lets Scheme will be abolished.
Bone said that cheaper train tickets could “open up more areas to commuters for our main cities and relieve pressure on some of the most sought-after areas”.
He added: “This should be high on the agenda, too, as we see more businesses implement strict return-to-office policies.”
Some of these views were gathered from Newspage.