Agents Distinctly Underwhelmed by Tories’ manifesto pledges

Agents, and others in the lettings industry, have given a sceptical response to the Conservative manifesto and its varied pledges about renting and more general housing issues.

The Tories’ commitments, should they be returned to office on July 4, include: 

- Making permanent the increase to the threshold at which first-time buyers pay Stamp Duty to £425,000 from £300,000;

- A new Help to Buy scheme to provide first-time buyers with an equity loan of up to 20% towards the cost of a new build home;

- A Family Home Tax Guarantee, to not increase the number of council tax bands, not extend Capital Gains Tax and we not increase Stamp Duty;

- A two-year temporary Capital Gains Tax relief for landlords who sell to their existing tenants;

- Enhance Right to Buy discounts in England; 

- Leasehold reform with ground rents initially capped at £250, reducing to peppercorn over time;

- Another Renters Reform Bill  “to fully abolish Section 21 and strengthen other grounds for landlords to evict private tenants guilty of anti-social behaviour”;

- Deliver landmark new laws that free leaseholders from cladding bill;

- Ensure councils have the powers to manage “the uncontrolled growth of holiday lets.”

But agents' trade body Propertymark says those rental-specific tax measures don’t go far enough.

Nathan Emerson, chief executive of Propertymark, says in response to the move: "Propertymark welcomes the concept of tax breaks, and we would like to see more support for homeowners. However, if the Conservatives are serious about supporting the private rental sector to grow, then they need to reverse the changes to mortgage interest relief and reduce the amount landlords pay when purchasing a buy to let property.

“Any renewed ambition to pick back up on the Renters Reform Bill must come with full disclosure and a workable timeline regarding vital court reform before aspects such as Section 21 evictions can sensibly be abolished.”

And Simon Gerrard, managing director of Martyn Gerrard Estate Agents in London, says: “These proposals by the Conservatives are devoid of imagination and emblematic of a party that is completely out of ideas” and he adds that with regard to Prime Minister Rishi Sunak “his proposals today are rehashed policies that have so far failed to solve this crisis and will do nothing to solve the problem. The overwhelming cause of our children having nowhere to live is the total dearth of new supply coming onto market. 

“Pledging to build 1.6 million new homes is hardly reassuring after their abysmal failure to meet their previous housebuilding targets. They are also doubling down on protecting the greenbelt, which desperately needs to be unlocked for development given the skyrocketing population growth in London. Meanwhile, there is nothing included to solve the nightmare of planning which has decimated building in this country.”

Michael Cook - chief executive of the Leaders Romans Group - comments: “The permanent raise of the nil-rate SDLT threshold for first-time buyers is a positive step, but broader reform is needed to unlock the market’s potential to help not only first-time buyers but also enable families to make the next step on the ladder. A Help to Buy scheme, whilst useful, must be carefully constructed to avoid inflating new home prices versus the rest of the market. 

“Regarding CGT relief for landlords selling to tenants, the practicality is questionable as few tenants are likely in a position to buy their rented property. 

“Instead of facilitating sales, policy should focus on attracting and retaining good landlords to balance supply and demand. Abolishing the unfair Section 24 tax would incentivise investment in the Private Rented Sector and stabilise rents.”

Karen Charles, executive director of the Boyer planning consultancy operated by the Leaders Romans Group, comments: “The Conservative Party Manifesto on planning and housing is commendable, but all indications are that the constraints to housing delivery particularly houses outside less urban areas, by the apparent sole focus on delivering homes on brownfield sites in urban locations, will continue.”

Neil Cobbold, commercial director of Reapit | PayProp, claims the Capital Gains Tax break proposed to be given to landlords selling to sitting tenants would boost the sales market but do little for lettings. 

Cobbold continues: “Incentivising landlords to reduce housing stock in the private rented sector through tax breaks sends the wrong message and could lead to even higher rents. Similarly, policies to boost the sales market need to be coupled with a significant housebuilding programme to ensure there is enough supply to meet renewed demand, or we may just see homes become even more unaffordable for the people the schemes above are trying to help.”