With a general election looming, here's what your agency and landlords need to know about Labour and Conservative plans for the housing sector.
Housing is always a key policy for any political party, as it’s a topic that affects everyone. The Conservative party has put all its eggs in the Renters' Reform Bill basket, with an array of changes to come. Not to be outdone, the Labour party has released a steady flow of stories around its plans for the housing and rental sector in the past few weeks. So, where does each party stand according to their recent statements?
1. Reforming private renting
Conservative party
The Conservative government's direction for the private rented sector is no secret. The Renters' Reform Bill, first revealed in 2019, is imminent. Its June 2022 white paper outlines proposals to abolish section 21, to shift all tenancies to periodic, and to introduce new standards to the rental sector.
Labour party
Shadow Housing Secretary Lisa Nandy declared in September 2022 that a Labour government would "tilt the balance of power towards tenants with new rights and protections for renters.”
The party promised a Renters’ Charter, offering an end to no-fault evictions, the right for renters to have pets, to make reasonable alterations to a property, introduce a four-month notice period for landlords - and bring in an end to automatic evictions for rent arrears.
2. Introducing rent controls
Conservative party
Although some corners of the Conservative party are in favour of a rent freeze, the current government has rebuffed claims coming from, among others, the Labour party Mayor of London, Sadiq Khan. The Renters' Reform Bill white paper shared that "this government does not support the introduction of rent controls to set the level of rent at the outset of a tenancy".
Labour party
There are plenty of vocal proponents of rent controls in the Labour party, including Lisa Nandy, Sadiq Khan and Manchester Mayor Andy Burnham. However, the party also includes some detractors, such as Shabana Mahmood, a senior MP and Labour’s Campaigns Manager.
The calls for rent freezes tend to crop up in cities, such as London, Liverpool, and Manchester, suggesting that a nationwide freeze or cap would be unlikely, even under a Labour government.
3. Boosting housing supply
Conservative party
The Conservatives set in 2021 an ambitious target of 300,000 houses to build by the mid 2020s. However, in December 2022, Michael Gove backtracked, and updated these targets as "advisory".
Labour party
In response, Labour party leader Keir Starmer has said that he would reinstate the target to build 300,000 homes under a Labour government - as well as updating planning laws to help local authorities have more say in what's built where.
Labour has also shared that scrapping the house building targets could cost tenants up to £200 per year by 2030. However, no specifics have been released around how this increased target would be made possible.
4. Helping first-time buyers
Conservative party
Prime Minister Rishi Sunak has said that he's considering reinstating the Help to Buy scheme, to help first-time buyers get on the property ladder. However, some say that this will simply inflate property prices more, negating the effect of the subsidy.
In 2022, then-Prime Minister Boris Johnson also committed to extending the Right to Buy scheme to housing association tenants. However, this change has yet to come into effect.
Labour party
Back in September 2022, Keir Starmer announced plans to shake things up, with "no more buy-to-let landlords or second homeowners getting in first."
The Labour party has released data showing that two thirds of children born in 2023 won't own a home before their fifties - has said that it's aiming for 70% home ownership. To reach this target, it proposes introducing a mortgage guarantee scheme and increasing the stamp duty surcharge for foreign investors.
Keir Starmer has also said that the party plans to give first-time buyers "first dibs" on new-build homes, over existing homeowners - although questions have been raised on how this would work in reality.
5. Providing social and affordable housing
Conservative party
A poll recently found that three quarters of Conservative voters want more social housing built in the UK. The Department of Levelling Up, Housing and Communities has shared that it has invested £11.5bn in its Affordable Homes Programme to "deliver tens of thousands of homes for rent and sale right across the country."
However, its targets - now deemed "advisory" - only allocated 33,550 homes for social rent. That figure is at odds with the social housing waitlist of more than 1 million households.
Labour party
Nandy has shared that Labour would "restore social housing to the second largest form of tenure." Currently, social housing sits behind private rented properties, at only 17% of households.
For example, the party will aim to reduce the number of social homes being sold through right to buy - while making sure that new social housing is built in their place. However, Labour have yet to release concrete plans around how they aim to achieve this target.
6. Regulating holiday homes and short-term lets
Conservative party
The current government has started to take steps in recent months to crack down on short-term and holiday lets, particularly in tourist hotspots.
The rules around accessing business rates for short-term rentals have already tightened, and two new consultations have recently been published. These will assess planning permissions and a short-term let register in England. Wales and Scotland have already implemented their own licensing schemes through their devolved governments.
Labour party
Back in July 2022, the Labour party surfaced a concept similar to the licensing scheme in Wales for short-term lets in England.
This has the same aim as the measures that the Conservative government is suggesting - to help support tourist areas hard hit by the influx of holiday homes. You can read more about the Welsh system in our blog. The party is also reportedly considering raising the 3% surcharge for second homes, and raising the council tax premiums to max. 300% if it comes to power.
7. Abolishing the leasehold system
Conservative party
In January 2023, Michael Gove pledged to end the leasehold system, and convert it to a commonhold system - but the Guardian now reports that he's backtracked on this pledge.
Now, measures expected to come into play are a cap on ground rents, more powers for tenants to choose their own property management companies, and a ban on the building owners forcing leaseholders to pay legal costs arising from disputes.
Labour party
Nandy previously has supported abolishing UK leasehold laws, dubbing them “feudal” and “archaic”.
She approves the introduction of a "commonhold" system instead - something floated back in 2019 in Labour's report, "Ending the Scandal – Labour’s New Deal for Leaseholders."
Stamp Duty Surcharge: Labour considers raising it even higher
Labour is considering raising the buy to let and holiday home stamp duty surcharge above the current three per cent if it wins power at the General Election.
An online announcement by two Labour parliamentary candidates claims that shadow housing minister Matthew Pennycook is considering “raising the 3% stamp duty surcharge for second homes.”
The statement comes from Jayne Kirkham, candidate for Truro and Falmouth, and Perran Moon candidate for the nearby Cornish constituency of Camborne Redruth and Hayle. The statement says: “On the pressing issue of the excessive numbers of second homes and short-term holiday lets, where the Conservative government has manifestly failed to act with the urgency required, Labour is giving serious consideration to a raft of new powers and tools to tackle the problem.
“These include the introduction of new planning use classes and greater scope to use Article 4 directions to give local communities the ability to address excessive concentrations of second homes or holiday lets; the ability to implement selective licensing schemes for holiday and short-term lets; raising the maximum level at which local authorities can set council tax premiums to 300%; and raising the 3% stamp duty surcharge for second homes.”
It adds the reforms are also being considered to the planning system to give local communities greater control over housebuilding in their areas by according greater weight to up-to-date local and neighbourhood development plans and introducing mechanisms to block speculative development that does not align with them.
The statement goes on to say: “Labour has already committed to ensuring that local first-time buyers will be prioritised for new homes built, so that our grown-up children living at home are finally able to get on the housing ladder. Labour’s new Renter’s Charter will protect Cornish tenants and make renting more secure by scrapping Section 21 ‘no fault’ evictions and extending notice periods. Under a new Labour government, rapid devolution of powers to Cornwall will begin the process of solving the Cornish housing crisis – with a goal of ensuring that everyone will have a first home, before anyone owns a second home.”
Kirkham says, “Our housing crisis has been getting steadily worse right across Cornwall. We have upwards of 25,000 second homes and holiday lets in Cornwall. Meanwhile, 23,500 families wait for a home on the Housing list, because purchase and rental prices are way beyond their means. The Labour Party completely understands the challenges this presents for Cornish communities.”
Moon adds, “I am extremely excited about the range of measures that Jayne and I have been discussing with colleagues at Labour head office. I am very confident that by the time of the general election, the offer we make to the Cornish people to deal with our housing crisis will be in stark contrast to the record of abject failure on housing from Cornish Conservatives, both locally and nationally. When it comes to dealing with the Cornish housing crisis, Labour means business.”
Keir Starmer praised after vowing to ‘back the builders’
Labour Party leader Keir Starmer said Labour will “back the builders, not the blockers” – a message that has gone down well with the NFB House Builders Association. The Labour leader has committed to bringing back housing targets, as well as debating housing and planning, including appreciating that not all of the greenbelt is sacrosanct.
He said: “We would make those tough choices and say to local areas, notwithstanding that it’s greenbelt, if it’s a car park or similar land which doesn’t affect the beauty of our countryside… then we’ll change the planning rules, we’ll give you the powers to do that.”
In response, the NFB House Builders Association’s head of housing and planning policy Rico Wojtulewicz reacted positively. The association accused the governments’ reforms of being watered down, coupled with anti-development narratives that have struck a blow for levelling-up and housebuilders, especially SMEs.
Wojtulewicz said, “finally, we are getting some nuanced conversation on housing and planning policy. While we disagree that builders decide supply, because this is the role of local plan making and allocations, the green belt is in place to stop urban sprawl, not hinder good placemaking. The government’s brownfield-first strategy is a good example of hindering good placemaking. It seeks to avoid using greenbelt by increasing urban populations on land set aside for non-housing needs. Yet with higher populations, where does non-housing infrastructure now go?
Or do they just not get built, as is often the case today? Labour appear to have accepted that city boundaries must play a part in good placemaking and may be hinting at a greenbelt review, something the government turned down when Conservative backbenchers requested it. After an awful two years regarding housing and planning debate, we might be entering a period where the torch of ambition that existed under former Housing Secretary Robert Jenrick is being relit by the Labour party.”