General Election Spotlight 2024: Key Housing Market Reforms

Key Areas for Reform

1. Accelerating House-Building and Supporting First-Time Buyers

• Current Situation:
  • House prices have increased by 22% over the past five years.
  • Rents have surged by 40% in the same period.
  • Buyer demand has risen by 15%, while supply has dropped by 6%.
  • Rental demand has increased by 32%, with supply reducing by 38%.

The UK Government regularly identifies that there is a lack of new homes being built to satisfy this demand, created by positive net migration and general population growth. Unfortunately, each successive politician who has their turn in power fails to meet their own targets, or positively change the status quo. All of this leads to unsustainable price increases, affordability issues across the board, and people having to move away from the areas that they have built their lives, or suffer substandard living situations.

• Proposed Solutions:
  • Streamline Planning Processes: Simplify and make planning more efficient to accelerate house-building.
  • Build-to-Rent Sector: Expand to meet rental demand, with quicker development policies.
  • Mortgage Affordability: Review criteria to make it easier for first-time buyers to qualify.

2. Reforming Stamp Duty

• Current Situation:
  • Stamp duty acts as a barrier to moving, especially in high-priced areas.
  • Only 4% of homes in London are exempt from stamp duty, compared to 71% in the North East.
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Did you know? Stamp Duty was first introduced in 1694, during the reign of William and Mary, intended to assist in paying for the war against France. It was so successful that, although originally intended to last only for 4 years it continues to this day in one form or another.

Does it actually help the treasury though? During the most recent stamp duty holiday, stamp duty revenues actually rose by 27 per cent in Q3 2021 compared to Q2, from £1.1bn to £1.35bn. Simply because more people were able to buy and sell.

Because the tax is levied as a percentage of the purchase price, of course buyers in more expensive areas like the Richmond Borough get more in cash terms from a stamp duty holiday – and would save the most altogether. But there would be wider benefits too. Increased house sales would send a powerful signal to developers that if you build it, you can sell it, thereby boosting supply at all levels of the market.

• Proposed Solutions:
  • Permanent Changes: Make current first-time buyer stamp duty exemptions permanent.
  • Regional Adjustments: Adjust thresholds to reflect regional property prices, encouraging movement.

‍3. Promoting Greener Homes

• Current Situation:
  • Lack of awareness and support for green home improvements.
  • Decline in landlords planning energy-efficiency upgrades.

Even with recent inflation data showing that things are heading in the right direction, the cost of living crisis is still being strongly felt. Not only do Greener homes help the environment which is undoubtedly paramount, but also have the potential to reduce everyones day to day bills and reliance on fossil fuels. Aside from the direct benefits, if the government took decisive action to bring about change, this would also see a flourishing green industry creating jobs across numerous professions.

• Proposed Solutions:
  • Legislation and Incentives: Provide clear legislation and support through grants or tax savings.
  • Green Schemes: Improve access to schemes for homeowners to make energy-efficient upgrades.

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4. Simplifying and Speeding Up the Home-Buying Process

• Current Situation:
  • Home-buying process takes over seven months from listing to moving.

It's sometimes hard to believe it, but it's true. You make the massive decision to move home, with all of the uncertainty and disruption that come with the territory. You wouldn't believe that if things go well, it's likely seven months before you will be handing over keys. We always tell our clients - finding you the best buyer is the easy bit. Keeping traction and communication flowing to ensure that the rest of the process continues to plan is where 70% of our work is found. The amount of red-tape and disjointed parts of the sale process means that things simply take far longer than they should. It's perfectly possible for things to be a million times simpler. There are many countries that put us to shame. Both Australia and the USA average 30-40 days.

• Proposed Solutions:
  • Standardise and Digitise: Collaborate with the property industry to create standardised, digitised processes to reduce time and stress.

We Want to Hear From You!

At Bartlett & Partners, we value your opinions. What are your thoughts on these proposed reforms? Which changes do you think are the most critical? Get in touch with us - you know that we would love to hear from you!