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Briefings

Member Briefing: Cameron sets out vision for a property-owning democracy as Conservatives launch manifesto

Date: 14/04/15

Cameron sets out vision for a property-owning democracy as Conservatives launch manifesto

  • Conservatives launch manifesto pledging to help families onto the housing ladder
  • Green Party manifesto talks of ‘breaking up big builder cartels’ 

At the launch of the Conservative Party election manifesto in Swindon, Prime Minister, David Cameron has set out his vision of creating a “property-owning democracy”.

The Conservatives’ manifesto reports that house building is at its highest since 2007 and goes on to make a series of pledges aimed at making home ownership more achievable. Central to the Party’s plan is its much-proclaimed ‘long-term economic plan’ to help maintain an environment in which interest rates remain low.

First-time buyers

The manifesto includes the aim of doubling the number of first-time buyers in the next Parliament as compared with the last five years. To do so, Conservatives would extend the Help to Buy Equity Loan scheme to 2020 with the Help to Buy Mortgage Guarantee to continue, as planned, until the start of 2017.

Reaffirming announcements made earlier this year, the Conservatives intend to double the current official target for Starter Homes to 200,000 homes for first-time buyers over the course of the Parliament. This would be achieved by re-designating Starter Homes as an affordable housing product potentially available on all sites rather than just specific Starter Home developments.

The Help to Buy ISA, as announced at the Budget, which provides a government ‘bonus’ of up to £3,000 to individuals saving for a deposit on a first home, features prominently in the section of the manifesto headed ‘Helping you to buy a home of your own’.

Brownfield Regeneration Fund

The Prime Minister has pledged to bring forward a £1bn Brownfield Regeneration Fund with an aim of building 400,000 new homes on brownfield land by the end of the next Parliament. The fund will be opened for local authorities to bid on in order to bring forward additional brownfield land for housing. Monies would be used to clean up contaminated land, and provide infrastructure to open up inaccessible site. This would, in effect, operate along similar lines to Housing Zones but with the funding available as a grant to councils rather than a loan or other arrangement.

The fund is described in press briefings as a means of increasing the supply of new housing ‘while protecting the greenbelt’. Protection of the greenbelt is referenced several times in the manifesto.

The Brownfield Regeneration Fund would be funded following the sale and replacement of the most expensive local authority housing assets. See below for more on this.

Affordable housing

As reported in the media this morning, the Prime Minister is proposing to extend the Right to Buy to housing association tenants. 800,000 housing association tenants currently have a limited ‘Right to Acquire’ with discounts capped at up to £16,000. Conservatives are committing to enhance the discount available to these tenants and extending the same opportunity to approximately half a million tenants who currently have no such right to purchase their current home.

Funding pledges by requiring local authorities to manage housing assets more efficiently

To fund the Brownfield Regeneration Fund and the extension of the Right to Buy, a Conservative government would legislate to insist that expensive council housing is sold on the open market to fund its replacement with more ‘normal affordable housing’. This is expected to lead to this sale and replacement of around 15,000 homes per year. After funding replacement affordable housing on a one-for-one basis surplus proceeds would fund the Right to Buy for housing association tenants and the Brownfield Fund.

Expensive properties are defined by the Conservatives as those falling within the most expensive one-third of similar properties (both private and social) in that area.  Based on current values, for a 3 bedroom house the threshold would range from £155,000 in the North East to £490,000 in London. 

Custom build

Continuing the emphasis the current Coalition Government has placed on self-build and custom-build, Conservatives are aiming to ‘at least double’ the number of such homes, and take forward the Right to Build requiring councils to allocate land to local people to custom-build their own homes.

Garden Cities

‘Locally-led garden cities’ are supported in the manifesto with a commitment to match local support for new settlements such as Ebbsfleet and Bicester, with the infrastructure necessary to make them sustainable.

Apprenticeships

The manifesto confirms the Coalition Government’s intention to abolish employers’ National Insurance Contributions for apprentices under the age of 25.

Property taxes

Repeating the announcement made over the weekend, the manifesto includes a commitment to ‘take the family home out of inheritance tax’ by increasing the effective threshold for married couples to £1m.

English devolution

As well as the Party’s plans for ‘English votes for English laws’, Conservatives pledge to devolve powers and budgets over economic development, transport and social care to large cities which choose to have elected mayors. In London, a Conservative government would devolve further powers to the Mayor in relation to skills spending and planning.

The Conservative Party manifesto can be read here. The section on housing and home ownership begins on page 51.

Green Party Manifesto focuses on social housing

The Green Party has also published its election manifesto, For the Common Good, at an event in East London today.

Setting out the Party’s plan to ‘make housing more affordable and sustainable’, the manifesto explains how what it describes to be the ‘current chaos and unfairness’ in housing has been caused by a ‘misplaced faith in the market as the way to meet housing need’ and a lack of investment in social housing.

Social housing ambitions

The main housing policy involves a restatement of the Party’s ambition to build 500,000 social rented homes over the course of the Parliament by quadrupling the current £1.5bn affordable housing budget and removing council borrowing restrictions.

House building industry

The house building industry is addressed directly as the Greens commit to a ‘break up of the big builder cartels’. In the short-term it plans to do this through measures such as increased transparency in the land market, the transfer of public land into community land trusts and parcelling large regeneration sites into smaller plots for development through the custom build model.

House price stability

In order to make house prices more stable, the Greens are proposing:

  • Scrapping Help to Buy which the Party claims ‘does nothing to help those most in need and contributes to excessive demand’
  • Phasing out Stamp Duty to be replaced by a Land Tax
  • More powers for the Bank of England to limit the size of mortgages in relation to the property price and borrower’s income
  • Removal of incentives for buy-to-let purchasers
  • Minimising ‘encroachment’ onto greenfield sites
  • Introduction of  a council-run ‘Right to Rent’ for households finding it difficult to pay their mortgage
  • New higher Council Tax bands

Private rented sector

The manifesto makes clear ‘there is a place for the private rented sector’ but proposes stricter regulation with measures such as the introduction of five-year fixed tenancy agreements and a mandatory licensing scheme for landlords.

The full manifesto, For the Common Good, can be found here. The section on housing begins at page 41.

 

David O’Leary

Deputy Director of External Affairs