Conservative Party Conference: May finally takes ownership of housing

Theresa May closed a Conservative Party Conference that has been marred by party politics surrounding Brexit and her leadership.

Brexit, as expected, was the overarching theme over the four days, but that is not new; the UK’s relationship with the EU has been a high-level talking point for the party for decades. Domestically, the Prime Minister made a very positive announcement on housing, by lifting borrowing caps for councils; a policy that RICS has repeatedly called for.

Operation: Council housing

Earlier this year it was reported that 58 councils had set up housebuilding operations since 2012, but in total delivered a little over 500 new homes with over half delivering none. It would be useful for the Government to explore why this is the case, especially given their immigration announcements, as it could be that a lack skills and labour that is a constraint. If the Government is going to provide Councils with further investment capability it must ensure that the right professionals are tasked with this additional responsibility.

Similarly, the Conservatives remain vocal proponents of the Right to Buy – and access to home ownership was emphasised liberally at conference; but, in short, this policy is constrictive for councils to fully add their weight behind the housing supply challenge.

We would urge the UK Government to reform the current Right to Buy process to ensure that the policy provides affordable homes for the long term not just those who wish to buy now.

(Even more) changes to Stamp Duty

The Stamp Duty Land Tax (SDLT) regime has seen numerous changes over the last few years; in fact, every Autumn Budget since 2014 has seen changes – and this looks set to continue this year.

The Prime Minister announced a surcharge for non-domestic buyers of property in the UK. We do not believe this change will make any sweeping alterations to the housing market’s activity; we will likely see domestic buyers replacing foreign ones. Surcharges for non-domestic buyers are not uncommon, as other countries, such as Singapore and Hong Kong have similar policies – but have significantly less space to build new housing on.

That aside, the Prime Minister stated that any revenue generated from this new stamp duty surcharge will be used to help homelessness; and this is welcome. It would, however, be prudent if she – or the Chancellor at the forthcoming budget – confirm that the Government will ringfence this additional revenue for initiatives that will tackle homelessness; or, as a minimum, be clear of what percentage of the revenue generated will go to specific programmes or strategies.

It is important that the Government recognises that changes to market policies need time to embed and for participants to adapt; regularly changing regimes disrupt confidence which, ultimately, can impact negatively upon activity and performance. SDLT has seen several changes in recent years, with the market struggling to adapt to one change before another is introduced.

The Prime Minister’s statements on her housing policies sandwiched other announcements made by James Brokenshire MP – Secretary of State for Housing, Communities and Local Government. It would appear, however, that the Prime Minister is keen to keep her “personal mission” to tackle the housing crisis her own.

Light infrastructure

Whilst headline announcements on existing infrastructure investments were made, no new commitments were given. Indeed, this conference was light on policy for infrastructure except for announcements around automatic refunds for train delays. This, however, is excusable as this was a party conference, not a Budget statement. Ultimately, automatic refunds may reduce administrative burdens, but this policy fails to deliver the tangible needs for a growing population.

The Government will be aware that greater action is required on infrastructure as the sector requires rapid improvement and improved connectivity, so we will expect to see several announcements on 29 October – specifically around the replacement for European Investment Bank funding.

 

Kindly shared by RICS