With the General Election just two weeks away, it’s a good time to review the Housing Policy in the 2024 election proposed by the Conservative and Labour parties. Both parties recognise the key issues facing the UK housing market, but their approaches differ significantly.

New Homes

• Conservatives: They pledge to build 1.6 million new homes during the next parliamentary term. Their focus is on utilising previously developed land, known as brownfield sites, and making it easier to gain planning permission for these areas. They also plan to support smaller, local builders by requiring councils to allocate land to them and easing the responsibilities linked to Section 106 agreements.
• Labour: Labour plans to build 1.5 million new homes. They propose substantial changes to the planning process, including hiring 300 new planning officers, offering better deals for landowners, and granting more powers to Mayors. There’s also speculation that Labour may consider freeing up parts of the green belt, particularly around London and other major cities, to facilitate this housing expansion.

Both parties aim to help first-time buyers through schemes like Help to Buy and Mortgage Guarantee, though Labour emphasises giving priority to first-time buyers on affordable housing developments.

School Fees

Labour has proposed imposing VAT on private school fees, which could raise approximately £1.5 billion. This policy might indirectly affect the housing market, as some families may move their children to state schools, increasing demand for homes in areas with top-performing state schools. The Conservatives have not proposed similar measures.

Freehold & Leasehold Reform Act

The Freehold and Leasehold Reform Bill recently became law, and it’s now up to the next government to implement it. The Conservatives do not currently plan to reform or cap ground rents, likely due to concerns about the impact on pension funds. Labour, however, intends to cap ground rents, with initial reports suggesting limits of £1,000 in London and £250 elsewhere.

Stamp Duty

The Stamp Duty Land Tax (SDLT) cut, introduced post-COVID, is still in effect, with the minimum threshold raised to £250,000 until March 2025. Neither party plans major changes, though the Conservatives propose freezing the first-time buyer threshold at £425,000, while Labour suggests adding a 1% surcharge for overseas buyers.

Capital Gains Tax

To encourage homeownership, the Conservatives propose a 100% Capital Gains Tax (CGT) relief for landlords who sell to their tenants before June 2026. They also announced a reduction in CGT for landlords from 28% to 24%. Labour has not proposed changes to CGT.

Rental Reform

The Rental Reform Bill, which did not pass before the election was called, has support from both parties. Labour wants to immediately abolish Section 21 ‘no-fault’ evictions and introduce rent controls, while the Conservatives propose abolishing Section 21 after reforming the court system and have not included rent controls in their plans.

Regardless of the election outcome, Housing Policy in the 2024 election will make changes to the housing and rental markets, with both parties recognising the need for more housing and the important role of landlords in the UK housing market.

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