Housing Policy in the 2024 Election: Conservative vs Labour

With the General Election just 2 weeks away, we take a look at the different housing policies being proposed by both the Conservatives and Labour parties.

There are some key issues affecting the UK housing market and the major parties seem to agree on much of what is needed. It’s how they plan on going about it that is different.

New Homes

The Conservatives pledge to build 1.6 million new homes during the next parliament. Labour have said they plan to build 1.5 million new homes. Saying they plan to build these new homes is great, we all know we need more housing, but how and where will they be built and who will they be built for?

Labour have suggested fairly significant changes to the planning process, to include 300 new planning officers, better deals for landowners and more powers for Mayors. There have been rumours that Labour may free up portions of the green belt, particularly around London and other major cities.

The Conservatives have set their sights on previously developed land or brownfield sites across the UK whilst making it harder for planners to refuse permission on such land. They also plan to support smaller and local builders by insisting that councils allocate land to them and relax the burden that can come with Section 106 responsibilities.

Both parties are keen to help first-time buyers with Help to Buy and Mortgage Guarantee Schemes. Labour have said they want to give first-time buyers priority on new build sites but this is likely to be on affordable housing developments only.

School Fees

In an attempt to generate what could be £1.5 billion Labour have confirmed that it will, if elected into Government, impose VAT on private school fees. This will likely have an indirect impact on the housing market. Whilst some wealthy families will be able to soak up the extra 20%, others won’t and will be left with no choice but to move their children into the state school system. This will have a impact on demand for local housing in areas close to and within the catchment of the best performing state schools, thereby potentially driving up prices. The Conservatives have not, as yet, announced any plans to do the same.

Freehold & Leasehold Reform Act

As part of the ‘wash up’ process before the dissolution of parliament the Freehold and Leasehold Reform Bill achieved Royal Assent and became law. It is now the responsibility of the new Government (whoever that may be) to enact the law. Although mentioned within the original Bill the Conservatives have no plans to reform or cap ground rents at this time, presumably due to the sizeable impact on pension funds. Labour however have said that they will cap ground rents. Whilst the detail is unknown at this stage, original reports suggested ground rents would be capped at £1000 within London and £250 outside of London.

Stamp Duty

We witnessed a Stamp Duty Land Tax (SDLT) cut post-covid in an attempt to stimulate the housing market and we are technically still in this SDLT holiday. The minimum threshold before SDLT becomes payable is currently £250k, up from £125k and will stay that way until March 2025. Whilst neither party plans to make any significant changes to SDLT, the Conservatives have said that they will freeze the minimum threshold for first-time buyers at £425k and Labour has pledged to add an additional 1% on purchases by overseas buyers.

Capital Gains Tax

In an attempt to boost homeownership and encourage landlords to sell up the Conservatives have promised 100% relief on Capital Gains Tax for landlords who sell to their tenants before June 2026. Yes, this may encourage some landlords to sell to their tenants, assuming their tenants want to buy the property, but generally speaking I can’t see this having a significant impact. They announced, as part of the spring budget, that Capital Gains Tax would also be reduced from 28% to 24% for landlords selling their rental properties. Labour have not mentioned any changes to Capital Gains Tax within their manifesto.

Rental Reform

Unlike the Freehold and Leasehold Reform Act the Rental Reform Bill did not make it to Royal Assent before the election was announced and parliament was dissolved. Despite that, both major parties support the Bill in one form or another. As far as I can see the two key contentious issues are a. Labour want to abolish Section 21 ‘no-fault’ evictions immediately (without court reform). The Conservatives plan to do the same but after reforming the quagmire that is the current court system and b. Labour are threatening rent controls whereas the Conservatives did not include them within the original white paper.

Whatever the outcome of the election, we can be sure that there will be changes to the housing market and especially the rental market. Both parties seem to agree that we need more housing and that landlords play an important part in the supply of homes across the UK.

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3 thoughts on “Housing Policy in the 2024 Election: Conservative vs Labour

  1. Trish Webb

    The only party which understands the private rental sector and has pledged to remove section 24 is Reform.

    1. elloproperty Post author

      Section 24 has had massive impact on landlords, especially those that are highly geared. Unfortunately I think it’s here to stay.

  2. Dawn

    The fact that neither of the two main political parties are talking about sec 24 is making me lean towards voting for Reform.
    Section 24 needs to go, it’s completely unjust, no other business is taxed on money they never had?!
    This is coming from a life long Labour voter and NHS worker

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