Until now, the Conservative housing policy as it affects landlords has been largely determined, not only by the previous Chancellor’s policies to reduce individual buy to let investment through increased taxation (Section 24), but by the government’s ‘Broken Housing Market’ report.
The prevailing view appears to be that landlords have stopped first-time buyers from gaining a hold on the property ladder, and that renters needed protection via a fairer deal. As landlords will know, the results of this approach have included higher stamp duty, the establishment of a ‘rogue landlord’ database, increased safety checks, more licensed areas and, of course, the recent proposal to change Section 21.
The question every landlord and agent is likely to ask is: will Boris Johnson continue along this route, or will change his approach to the housing market during his premiership?
Is there cause for concern?
It’s evident that Brexit will take up most of the new Prime Minister’s time and energies initially. If so, it’s unlikely that under Boris Johnson landlords will have to worry about major changes affecting themselves and the current property market. He might even be less likely to tinker in, most particularly, the rental market. He had some impact on this as Mayor, but his view during that period was that regulation, including rent controls, wasn’t a very constructive approach. It seems likely, then, that under Boris Johnson, the Conservative government will adopt a more traditional approach as regards the Private Rental Sector.
It is also worth bearing in mind that while successive governments’ policies have a clear impact upon landlords, the truth is still in many parts of the country, homes are in short supply, whether for sale or for rent. This is good news for landlords who are content and able to remain in the property market. The predicted increased demand and rent rises should provide reassurance that objectives are still achievable, and that it’s more than worth their while to retain their property as a long-term investment.
Will there be changes generally across the housing market?
Boris has previously suggested some changes that he may introduce. Those that have been published so far include:
Supporting first-time buyers, brownfield development and good design
These ideas, published by the right-wing think tank ‘Policy Exchange’, were supported by Boris Johnson. They include providing developers with incentives to build ‘beautiful homes’, incentivising homeowners to downsize through better availability of retirement homes, and continuing support for new homes to be constructed on brownfield land. He also favoured a review of how first-time buyers are helped onto the housing ladder, in the light of Help to Buy’s withdrawal in the next few years. Perhaps the most interesting initiative of all is the proposal to ‘develop fifteen beautiful new towns on the edge of London’ which could lead to more investment opportunities.
Will there be changes to stamp duty?
Mr Johnson has suggested that he’s in favour of changes to stamp duty, such as cutting duty on sales under £500,000 and reducing from 12% to 7% the charge for property sales of over £1.5 million. However, only shortly after announcing this his team suggested a possible switch of stamp duty away from buyers and on to sellers.
A new Housing Ministry under Boris Johnson?
Another question arising is whether the existing housing team of ministers will change under Boris Johnson’s premiership. At present James Brokenshire runs the Department of Ministry of Housing, Community and Local Government (MHCLG), with Kit Malthouse responsible for tackling the building of more homes, and Heather Wheeler for improving the Private Rented Sector.
It seems likely that Kit Malthouse will stay in government since he worked with Mr Johnson at the London Assembly, and additionally he’s supported Mr Johnson in his bid to become Prime Minister (despite having himself stood for the role in the early stages of the race). Helen Wheeler and James Brokenshire may also remain as they have supported Mr Johnson in his bid for the premiership too.
To sum up, if the housing team is left largely in place, and if Boris Johnson maintains the approach towards the housing market that we’ve seen until now, major policy changes don’t appear probable and landlords should see it’s “business as usual”.
To find out how much rental income you can expect to achieve in the current rental market, arrange your free rental valuation with our team of lettings experts today!