Winner must help housing to recover

ALISON BEECH, BUSINESS RELATIONSHIP DIRECTOR, SPICERHAART
ALISON BEECH, BUSINESS RELATIONSHIP DIRECTOR, SPICERHAART

The imminent election is being described as the closest for two decades, but how similar are the main parties’ housing policies?

Stamp Duty seems to be on everyone’s agenda. Originally it was a Conservative plan, but now Labour has announced in its pre-election Budget that first-time buyers buying property under £250,000 would be exempt from Stamp Duty for the next two years.

The Tory manifesto outlined the same policy, but trumped Labour by making the exemption indefinite. Labour plans to pay for the loss of revenue by increasing Stamp Duty on properties over £1m to 5%.

The policy will come into place next April providing Labour wins the election, though commentators have suggested a Tory government is unlikely to reverse the plan.

One of the most pressing issues for housing is a lack of funding. Labour has announced lending targets for banks in which the government has a stake, with consequences for executive remuneration if targets are not met.

The Conservatives have committed to helping people onto the housing ladder, but have also suggested reducing the banks’ reliance on wholesale lending.

Any move to do that would increase lenders’ dependence on retail deposits and slow recovery. The challenge for whoever wins is how banks will refinance government-backed loans taken out during the crisis.

There is no magic solution, and a recovery in the housing market will depend on a blend of measures.