After weeks of campaigning dominating the media, we’ve had the main parties’ General Election catchphrases drummed into us-‘A fairer future for all’, ‘It’s time for change’, ‘Change that works for you’. But what do these big statements actually mean if the Labour, Conservatives or Liberal Demo-
crats come to power on May 6, and how could they affect the country-house market?
With a history of boom and bust under both Labour and the Tories, Justin Marking, head of Savills Residential, firmly believes that what happens at the top end in London determines the strength of the country market. ‘Therefore, anything that makes it easy for London to retain its status in the financial world is good.’
Mr Marking also favours housing-friendly plans, such as increasing the mobility of the labour force and keeping removal costs low. ‘Increasing Stamp Duty at the high end isn’t helpful at all, driving wealthy individuals out of Britain.’
James Bailey, head of sales at Henry & James in London’s Belgravia, is pleased the Conservatives have proposed dropping the dreaded Home Information Packs (HIPs), which should streamline the selling process. Ironically, HIPs were introduced in 2007 for exactly that reason, but he doesn’t believe they’ve improved selling at all, and, in fact, have probably made things worse.
Overall, Mr Bailey is disappointed that none of the parties have come up with anything innovative to spark the housing sector. ‘I’d like to see ideas that encourage the refurbishment of property to bring it up to 21st-century standards-perhaps taking VAT off renovations as incentive-and I’d love the next government to abolish Stamp Duty altogether.’
Conservatives
Pros
❍ Abolish expensive and unnecessary HIPs that increase the cost and hassle of selling homes
❍ Raise Inheritance Tax threshold to £1 million, taking the family home out of Inheritance Tax liability for the majority
❍ Give councils stronger powers to stop gardens and family homes being bulldozed to prevent unwanted ‘garden grabbing’ for infill development in suburban neighbourhoods
Cons
❍ The new 50p tax rate on the wealthy isn’t a permanent feature, but won’t abolish it while asking public sector workers to accept a pay freeze
❍ Tenants will need a five-year record (instead of the two years generally required currently) of ‘good behaviour’ to seek a 10% equity share in shared ownership
❍ A levy on ‘non doms’ introduced to pay for increased Inheritance Tax threshold
Liberal Democrats
Pros
❍ Reform‘non dom’ status, allowing people to hold it for up to seven years; after that, they will be subject to tax on all offshore income
❍ Offer grants or loans to bring 250,000 empty homes back into use
❍ New ‘home on the farm’ scheme encouraging farmers to convert existing buildings into affordable housing
Cons
❍ 1% ‘mansion tax’ to be paid annually on properties valued at more than £2 million
❍ Scale back Home Buy schemes that have helped first-time buyers, social tenants and key workers
get on the housing ladder
❍ Give local authorities power to set higher Council Tax rates for second homes and require separate planning permission for new second homes
Labour
Pros
❍ No Stamp Duty for first-time buyers on purchases below £250,000 for two years
❍ From 2014, care charges for the elderly will be capped (so people don’t have to sell their homes to cover care bills) after the first two years of payments
❍ Make Green living easier and fairer through a ‘pay as you save’ home energy-insulation scheme, with bill discounts for pensioners
Cons
❍ To fund Stamp Duty break for first-time buyers, a 5% rate will apply to all homes over £1 million
❍ A freeze on Inheritance Tax thresholds until 2014-15, which is unhelpful for many potential sellers who were hoping they’d be lowered
❍ No Council Tax revaluation, ducking the need to match property valuations to tax bands
* For more Property stories like this every week, subscribe and save
