As the political parties ramp up their efforts ahead a 2024 General Election, each party is starting to show its hand in regards to their housing strategy.
Of course, there is very little in the way of new policies when it comes to housing, often just recycled ideas - repackaged to look like new. Nevertheless, any notable effort and focus on increasing housebuilding is welcome.
During a recent media blitz, Starmer also promised to take on planning reform, bring back local housing targets and open up building on green belt land - providing it wouldn’t ‘spoil the beauty of the countryside’. There have also been suggestions that he would look to hike Stamp Duty for foreign property buyers and restrict them from purchasing more than 50% of properties in a new-build development, while giving first ‘dibs’ to first-time buyers (FTBs).
What is certain however is that, any party taking office next year, will need to act swiftly when it comes to reversing the current downward spiral the UK housebuilding market is facing.
Housebuilding during April declined at the sharpest pace for almost three years - since the Covid lockdown - according to the S&P/CIPS UK Construction Purchasing Managers’ Index. Delays to new house-building projects, constraints on demand and higher borrowing costs were blamed for the fall.
I’m not sure limiting foreign buyers or even prioritising sales to FTBs is the answer though. We need to focus on stimulants to the market, not deterrents.
Speaking to Times Radio recently, Starmer acknowledged developers and landowners can have a vested interest when it comes to building houses, as too many houses does not keep prices high.
While this might be true, nor are they going to make any profit by having a limited audience to sell to.
The Home Builders Federation has already warned house building in England could drop below 120,000 properties a year. If we limit who can buy on a site, it will clearly make it more difficult to sell properties, which in turn is not going to incentivise developers to build more homes. The end of the Help to Buy equity loan scheme, which aided the purchase of just under 400,000 new build homes since 2013, has already dampened the market. Therefore, holding back certain cohorts of buyers risks depressing it further still.
It also remains to be seen what, if any impact, limiting foreign buyers would have. While the prime London property market might be a favourite for overseas investment - I’m not sure they pose any threat to buyers looking to purchase a new build on a Derbyshire housing estate, for example.
Figures from the Centre for Public Data found there are around 250,000 residential properties in England and Wales registered to overseas individuals - only around 1 per cent of total housing stock.
While this number has more than doubled since 2010, I don’t think we need to worry about foreign buyers dominating the new-build market just yet.
It will also be interesting to see whether any polices are announced to encourage the building of more rental properties. Much of the focus thus far has centred on homeownership, with Starmer declaring he would like Labour to become the ‘party of home ownership’.
We did hear at the start of the year that the Labour Party was launching a ‘major review’ of the private rental sector, as well as revealing plans to launch its own version of the Renters Reform Bill - the Renters’ Charter - within 100 days of the next General Election, if elected.
As with the new-build market, it’s important there is also a focus on encouraging, not discouraging investment into new rental properties, as a healthy housing market is only going to be achieved through growth in both.
