Enness reacts to party manifestos
Islay Robinson (pictured) is chief executive of Enness
Much of the Conservative manifesto is vague on exactly how property and homeownership issues will be tackled. Despite pledging to reform and modernise the home-buying process to make it more efficient, the manifesto offers no detail on how this will be approached.
However, the Conservatives have promised not to increase VAT, and renewed their commitment to reducing corporation tax to 17%. This will encourage investment in the UK, ultimately stimulating the economy.
Their manifesto has also promised to improve protection for renters by encouraging longer tenancies, in line with the previously published housing white paper. The manifesto is very critical on developers and development standards, suggesting there may be an increase in rigour in regulating the standards of new home development. This is encouraging for renters, but the manifesto’s critical stance on developers may ruffle a few feathers.
While the housing manifestos remained fairly in line with what we’ve seen in recent years, various tax changes pledges are likely to have a negative impact on the country. Labour’s plans on spending an additional £48.6bn, paid for by high earners and businesses, is a disaster. Jeremy Corbyn’s pledged to raise the higher rate of tax to 50p on earnings above £123,000, and bring the threshold down from £150,000 to £80,000 for the 45p additional rate– with wealthy non-doms now taxed on their worldwide income, this is only going to further deter them from UK investment. We should be encouraging it as other countries, like Italy, are.
Additionally, Labour will raise corporation tax from 19% to 26%, a further deterrent for wealthy individuals to choose the UK as a place to do business. Not to mention references to an offshore company property levy, although this has been discredited, which could see wealthy investors rethink their investments into UK plc.
However, a positive of Labour’s manifesto is their pledge to give homeowners interest free loans to improve their properties. This would effectively help those who are lucky enough to own a property to grow their wealth by adding value to their home. Although, it would be even more beneficial to cut stamp duty to encourage people to move on and free up their homes, creating market movement
The Liberal Democrat’s plan to scrap letting agents’ fees creates a false economy. Not only will it deter investors from entering the buy-to-let market, leading to a reduction in much needed stock levels, but the tenant will be unlikely to benefit from this ‘saving’ in the long run.
Would-be landlords have already been discouraged from entering the market, thanks to the extra 3% stamp duty incurred on buy-to-let properties and reduced tax allowances, and this is a move which further deters this type of investment. With home ownership still a key issue and unattainable by many, we should be encouraging this type of tenure, not attacking the market further. Furthermore, this will not be a saving that the tenant sees in the long run. They will incur this additional cost, albeit not upfront, because the landlord will likely increase rental values in order to cover this fee. A more positive move would be to regulate these fees, ensuring fairness across the board, rather than simply shifting the charge to landlords.