It’s been three months since the General Election that gave the country a Conservative majority, and the dust has settled on the Emergency Budget the Chancellor called in early July. So what effect are the Conservative’s new policies having on the property market – and what does this mean for landlords, buyers, sellers and prospective tenants?
Landlords
Many landlords will have breathed a sigh of relief when the exit polls showed a Conservative majority – it means that the prospect of rent caps or controls will no longer be hovering over them. Labour often spoke of introducing rent control and guaranteeing longer tenancies in certain properties, but the Conservatives aren’t currently planning to make waves in the private residential sector.
However, George Osborne’s Summer Budget revealed that landlords will no longer be allowed to deduct 10% off their rental income to cover general maintenance on furnished properties. They must provide details of the cost of their furniture replacements, rather than using the 10% tax-free deduction as a way to lower their rent prices and make their properties more appealing. Could this move result in landlords opting out of providing furnished properties?
Buyers
It’s no secret that house prices are higher than ever before – especially in London and the rest of the south-west, where single rooms and garages routinely fetch hundreds of thousands when marketed as ‘studio flats’, and family homes cost more than £1m on average.
The Conservatives have outlined plans to build 100,000 new homes in the UK, but there are claims that this is nowhere near enough to meet demand. The Conservative’s pledge to allow housing association tenants the right to buy their property has also come under fire, with critics asking how the properties will be replaced. This lack of new homes could see house prices soar even further over the next five years.
Sellers
If you live in the south-west of England, now is a fantastic time to sell your property – you’re likely to get much more than you paid for it, and the demand for high-quality properties is such that most don’t stay on the market for long. The aforementioned lack of quality properties and new homes being built is sending prices soaring, so sellers under the Conservative government are likely to get a very appealing return on their initial investment.
Tenants
The extension of the Right to Buy scheme mentioned earlier is obviously a boost for many tenants currently living in housing association properties. They’ll be offered the chance to buy the property rather than renting, with a discount too – the price will be capped at £102,700 for homes in London, and £77,000 for the rest of the UK.
A Help to Buy ISA has also been introduced to help tenants currently saving for their first home – every £200 saved towards a deposit will be rewarded with a £50 cash bonus.
If you’re planning a move, ask I Am The Agent – the top online estate agency and online letting agent – about your options.
