Overnight the Conservative Party has secured a majority in Parliament, and it is worth taking note of how this may impact on property owners and landlords. Whilst these may not yet make it through Parliament, the Conservative Party has announced various property related approaches that include:
1. 3% increase in Stamp Duty for overseas buyers of UK property: This would be in addition to the Capital Gains Tax for overseas owners of UK properties introduced in recent years, which has been extended to now apply to UK properties owned via overseas companies and also to commercial properties sold by overseas owners. It is no longer possible to buy or sell property in the UK without a potential tax liability. For overseas owners, disposals need to be reported as they are made and any capital gains tax paid over at the time.
2. The Help to Buy Scheme is scheduled to continue until 2023 and presumably will continue as originally planned under a Conservative Government. As conveyancers, we see this scheme being widely used and there is now some certainty that it will remain in place. This will be welcome news for those looking to access it.
3. Shared ownership with Housing Associations: outline plans were included within the Conservative manifesto to encourage shared ownership with Housing Associations, enabling equity to be bought in smaller amounts (currently equity is structured through 10% chunks, whereas it is proposed that 1% shares would be able to be bought to make this more affordable for first time buyers).
4. Key Worker Housing: The Government is looking into providing housing at a below market value to “Key Workers” (thought to be nurses, police and teachers). The plan itself is still somewhat vague but it indicates housing to be available at a 30% discount, but that the discount would apply “in perpetuity”. This may mean that there are restrictions on the resale of the house, or that it is repaid on sale in some way.
5. Funding purchases: The Help to Buy ISA has now closed to new accounts, but Lifetime ISA’s remain available for those looking to save deposits for properties. These were not as widely available as the Help to Buy ISA’s but may well become more popular now that the other has ended.
6. Lifetime Fixed Rate Mortgages: One of the later pledges in the election campaign was to look to introduce lifetime fixed rate mortgages with a 5% deposit required, but whether these prove to be financially viable to guarantee, or whether they are attractive to borrowers is not yet apparent.
7. Lifetime Rental Deposits: For those in private rental properties it is proposed that deposits will be transferrable directly from one property to another, saving time and costs in releasing deposits and then lodging these with new landlords.
Landlords would have been impacted by policies proposed by the Liberal Democrats and the Labour Party, but in light of the Conservative majority it is unlikely that these will now see the light of day for the time being. These had included extending Right to Buy to tenants of private landlords, and increasing council tax by up to 500% for any empty properties.
Having a degree of certainty about the economic plans for the next few years always has an impact on property markets, so if you are looking to buy or sell, remortgage or transfer your property please contact us and we would be happy to assist.