Will the UK General Election affect me buying a house??

Published: 3rd July 2024
Author:Nick Farquhar
Idyllic English village with houses coloured in the colours of the UK political parties

As the UK heads to the polling booth on the 4th of July to vote, many of us will be thinking about housing. According to YouGov, housing is currently the fourth most important political issue facing the country, after the economy, health, and immigration.

Given it's so important, lots of politicians are talking about it, but what exactly are they promising and how will it affect you if you are buying a home (or interested in buying)?

We've included policies from all the parties with more than 10% share of the vote according to the latest polls. This means that we've included Labour, the Conservatives, the Liberal Democrats, and Reform.


Stamp Duty & Financial Help for First Time Buyers (FTBs)

Helping First Time Buyers get on the housing ladder is a priority for Labour and the Conservatives, with various schemes proposed to make it easier to get on the housing ladder.

These policies only require parliament to vote on them so are likely to affect house buyers first (other things like increasing home building will take longer).

Labour Party Conservative Party

*It should be noted that this 5% deposit scheme that Labour and the Conservatives mention is something that already exists (the Mortgage Guarantee Scheme) and has been used by nearly 43,000 people since April 2021. Also, 5% mortgages do exist outside this scheme, but the scheme aims to increase the supply of them through the government backing the loans, therefore giving lenders confidence that they won't default.

Liberal Democrat Party
Reform UK PartyREFORM

Building More Homes

A key issue facing First Time Buyers is that housing in the UK is incredibly expensive.

Building more homes is a common promise across all parties. The idea being that increasing housing supply should help reduce house prices, making homes more affordable.

Over the past five years, there have been about 200,000 new dwellings built each year in the United Kingdom, with similar levels since about 1980. All the major parties that give a target number are proposing reaching a level of home building not seen since the 1970s.

Chart showing how dwellings built compares to the parties targets

Number of houses built in the UK with party targets (source: ONS)

Labour Party Conservative Party Liberal Democrat Party
Reform UK PartyREFORM

Planning System Reform

But how are they going to deliver these new homes? Most parties think an overhaul of the current planning system is the way to go.

Last year, about 269,000 housing units were granted planning permission, which you may notice is below everyone's targeted house building volumes. To reach their house-building targets, all parties propose reforms to streamline and improve the planning permission system.

Number of residential units granted planning permission by year

Number of residential units granted planning permission in the UK (source: Gov.uk)

Labour Party Conservative Party Liberal Democrat Party
Reform UK PartyREFORM

Leasehold Reform

Leasholds are constantly in the press with countless stories of leasehold homebuyers held hostage to exorbitant service charges and other bills.

This is particularly relevant for First Time Buyers who often end up purchasing leasehold properties. For context, there are 4.86 million leasehold dwellings in England, or 18% of the English housing stock (up to 35% in London).

Labour Party Conservative Party Liberal Democrat Party
Reform UK PartyREFORM

Conclusion

It is encouraging that all the parties have recognised housing as a key issue and that helping First Time Buyers get on the ladder is important. Only time will tell if the winner of the election will manage to keep to their promises from their manifestos.

The only thing to take away from this if you are currently buying, or thinking about buying a home is that the Stamp Duty thresholds are likely to reduce in March 2025 so you want to buy before then if you will be affected by this!


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