With the election just days away, here are the Conservative Party manifesto policies which will impact landlords and homebuyers if they return to Government after 4th July.
In this article, we’ll cover the main Conservative manifesto pledges which will impact landlords, homebuyers and property developers. We’ll cover the Conservative Party plans for:
- The Renters’ Reform Bill
- Tax Policies
- Development & Homeownership
- Leasehold Reform
The Renters’ Reform Bill & Investment Property Regulation
We were so close and yet so far. Having reached the House of Lords (the final step before Royal Ascent), Sunak’s early election announcement may have put years of work, negotiation and lobbying in the bin. However, the Conservatives intend to bring the legislation with them if they return to power.
The Renters’ Reform Bill includes new rules around:
- Evictions
- Tenancy agreements
- Notice periods
- Refusing pets in rental properties
- Landlord registration
- Standards for rental properties
The Bill also includes reform around the court systems designed to speed up processes for landlords and tenants alike.
Holiday lets – having abolished the Furnished Holiday Letting Tax Regime in the 2024 Spring Budget, the Conservatives intend to give councils more power to better manage the so-called “uncontrolled growth” of the holiday let sector. This will allow local authorities to charge more council tax on short-term let and second homes than on main residence properties.
Tax Policies
Unlike other political parties, the Conservative manifesto doesn’t include a lot of new tax reform, as the majority was set out in their latest budget. However, two main changes will impact anyone purchasing or selling property.
Stamp Duty Land Tax (SDLT) – SDLT is charged on all land and property purchases with valued at £250,000 or more.
In September 2022, the Government announced a temporary increase of the 0% threshold for first-time buyers from £300,000 to £450,000. Currently, the temporary threshold will expire in March 2025. However, Sunak’s Government intends to permanently raise the threshold to £450,000 to encourage more people to enter into homeownership.
Although there have been calls for an overhaul of all the SDLT thresholds, including for a system based on average regional property prices and reduction of the 3% second-home surcharge, Sunak’s Government say they will freeze the remaining rates and thresholds for SDLT as they are.
Visit our Stamp Duty Calculator here to calculate the stamp duty due on your property purchase or view the current thresholds.
Capital Gains Tax (CGT) – This tax is paid on the profit you make when you sell an asset, in this case, property. You don’t pay it when you sell your primary residence, but it is due on all investment property.
As part of their campaign to help more first-time buyers onto the housing ladder, the Conservatives will waive CGT for landlords selling to existing tenants for two years. CGT is a significant financial barrier for many landlords selling investment property, but would this really be helpful for the sector when so many people still rely on the PRS for safe, affordable housing? Given the high demand for rental property, with an estimated 15 tenants competing for each one available to let, further reducing available stock will only continue to drive up rent rates, pushing tenant affordability to its limit.
Development & Home Ownership
New home building targets – having almost reached their 2019 manifesto pledge to deliver one million homes in five years, their 2024 pledge is to deliver an ambitious 1.6 million over the next parliament. Within these 1.6 million new homes, more will be allocated as affordable housing to boost home ownership. However, there are no specifics about how many this includes or what is considered an ‘affordable’ home.
Planning reforms – to support these building targets, Sunak’s new Government intends to simplify and speed up the planning process. This includes building on brownfield sites and removing the EU ‘nutrient neutrality’ rules to free up more areas for development.
The manifesto also pledges to support small and local builders by requiring local councils to set aside land for them. Doing so will not restrict new developments to large scale companies and areas.
Homeownership – having axed the previous Help to Buy scheme in 2022, the Conservatives intend to launch a revised scheme giving first-time buyers a loan of up to 20% towards purchasing new-build properties when they have a 5% deposit themselves.
They also intend to extend the Right to Buy scheme to housing association tenants.
Leasehold Reform
Having reached Royal Assent before Sunak called the election, the next Government can enact the Conservative leasehold reforms without having to go through the whole parliament process again. These reforms include:
- Removing marriage value, where a property with a lease of less than 80 years faces increased costs to extend the lease.
- Increasing the minimum lease extension from 90 years for flats and 50 years for houses to 990 years. This would also remove the need for property owners to own the property for two years before extending the lease or buying out the freehold.
- Preventing developers from selling houses as leasehold. This would not include flats or retirement properties.
- Increase transparency of leasehold costs like service charges and improve owners’ ability to challenge these costs.
- Capping ground rent to £250 and reducing it to peppercorn over time.
Of course, the Conservative manifesto includes many other policies that impact other aspects of our lives. However, hopefully, you will have found this a useful overview of how their pledges could affect your property investment plans.
You can view the full Conservative Party Manifesto here.
Visit our dedicated General Election Hub for more information about how the 2024 General Election will impact the private rental sector, housing, and other party manifestos.
