The Tory leadership campaign provokes the question of Jeremy Hunt or Boris Johnson, and simultaneously ‘Right to Own’ or stamp duty amendments accordingly.
In his bid to become leader, Hunt has revealed a proposition to launch ‘Right to Own’, a plan to deliver 1.5 million ‘cheaper’ properties over the next ten years by giving councils more power.
We asked a series of brokers which contender would be more beneficial to their business and the housing market in general.
Crystal Clear Financial Services director Mike Brown believes that Hunt’s proposition does not clearly outline how it will fit alongside current government schemes, and is lacks detail.
Looking at Hunt’s proposal, Brown voices concern over whether the mooted properties would be built in areas which require development, and whether the specified areas would have the infrastructure to support the new builds.
He says: “Although this will provide the opportunity for more first-time buyers onto the property ladder, this is only tackling one area of the property chain and not where the major bottleneck exists.
Johnson’s plan, however, would have a positive impact across the whole of the UK, adds Brown.
He continues: “The ‘next time buyer’ is where we see the lockdown in the current market, partly due to stamp duty costs, so an abolishment up to £500,000 would clearly see more stock on the market.
“The reduction in stamp duty at the upper end of the market I do not think is required but shifting of the upper levels and the percentages could see advantages in London and higher value areas.
Brown concludes by saying out of the two proposals “stamp duty has the potential to benefit more families and not just first-time buyers.” He adds that it would also have “an immediate effect on the market and the wider economy.”
City Finance Brokers director James Chisnall takes a similar standpoint as Brown. He says: “I find it hard to see how Hunt’s aim of ‘taking profit out of the developer’s pocket and giving the benefit to young people’ will incentivise developers to build more properties.”
Chisnall says that 1.5 million new properties over 10 years is not enough to address the issue, adding, “I feel this will have a minimal impact on our country’s economy in the short term.”
He continues: “However, Johnson’s idea of cutting taxes, particularly stamp duty, is certainly an exciting prospect. This will undoubtedly boost the economy by quickly increasing transactions in the housing market which will, in turn, help many professions and trades. This can only be a good thing.”
Meanwhile, The Mortgage Mum founder Sarah Tucker points to the regional divide as to the benefactors between Hunt and Johnson’s proposals.
Tucker believes Johnson’s proposal will benefit those living in the South East and London, while Hunt’s plan will be more beneficial for those from the UK’s remaining regions and less fortunate positions.
She says: “In reality there is a bit of a bigger debate going on here – helping the fortunate or helping the less fortunate. This is a debate that will continue to spark interest depending on which one will affect you and the area you reside in on a personal level.”
L&C Mortgages associate director communications David Hollingworth also highlights the contrasting approaches taken by Johnson and Hunt.
However, Hollingworth outlines the proposal’s core differences as being long-term and short-term solutions accordingly.
He says that while Johnson’s plan would immediately affect those already contemplating a purchase, Hunt’s idea is more of a structural change toward the supply of new homes and therefore would take time to establish.
Hollingworth concludes: “Depending on how the Brexit negotiations proceed there may well be a need for both short and long term thinking to make improvements to the market and the reality is that we will need thinking of both short and long term, not to try and choose between one or the other.”
Trussle mortgage expert Dilpreet Bhagrath alternatively notes what is not included in the two proposals.
Bhagrath outlines that Theresa May’s government “warned they would take action against companies charging a loyalty penalty.”
She says: “I would like to see both candidates commit to finishing the work Theresa May set into motion to tackle the loyalty penalty in the mortgage market so that this is a priority for the next prime minister.”