With the idea of Jeremy Corbyn serving as Prime Minister resonating as a real possibility in the coming years, many wonder what effects and threats a Labour Government could have on the current UK property market. The Labour Party conference, which was held in Liverpool throughout September, has split the electorate down the middle, creating uproar amongst property investors with talk of new punishing tax changes and rent controls.
Earlier this year, the Labour party revealed plans for tackling the country’s property market should they be successful in their campaign to gain political power. Corbyn, who has been leading the Labour party for three years, disclosed his plans for the UK housing market, stating that providing affordable housing for all was at the top of his agenda. Corbyn and the rest of the Labour party have pledged to tackle the UK housing crisis by supplying a number of homes to those who currently aren’t eligible for council housing. Low and middle income families, young people and key workers could all take advantage of these ‘living rent homes’, with rent prices far cheaper compared to private alternatives.
There have been a number of different policies and changes regarding the property market suggested by the Labour Party, including plans to double council tax on secondary homes and the removal of section 21 eviction notices. It is in the wake of these proposals that landlords and property investors have taken to the media to voice their anger. The Labour Party plans to increase the rights of tenants residing in private rental accommodation with the removal of section 21 ‘no-fault’ eviction notices. The policies to protect tenants, although formed under the current Conservative Government, can be expected to expand and toughen under the control of a Labour Government.
There has also been talk of changes to rent controls amongst Labour supporters who continue to campaign for reform, however Corbyn is yet to officially speak on the matter. It has also been suggested that the historic domestic rates system will make a return under a Labour Government and those at the higher end of the house price bracket will face the consequences of dearer local authority services. Electorates have also speculated that, should they come into power, the Labour Party will impede on property investments and current tax instruments.
Despite Jeremy Corbyn’s attempts to tackle the current housing crisis, his priority to “deliver affordable homes” somewhat undercuts the real issues at hand – that landlords and property investors are not being afforded the same protection as tenants and homeowners. As a nation, we are notoriously good at adapting to change and the adjustments to the property market as a result of a shift in power in the British Government will be no exception. It will however be interesting to see what reforms and policies Corbyn plans to introduce and whether the property market will face turmoil as a result of a declining faith in the political system.
Hopwood House are property investment specialists, with a large portfolio of investments in the student property, care home and buy-to-let investment markets throughout the UK and overseas.