What Does a Conservative Win Mean for Landlords and Tenants?
The results are in and the Conservatives are here to stay, so what does this mean for tenants and landlords up and down the country? Here is a simple break down of the key Conservative housing policies put forward in their manifesto, particularly those affecting landlords and tenants.
‘A Better Deal for Renters’
In their manifesto the Conservatives set out to bring in a ‘better deal for renters’ which includes a transferable ‘lifetime’ deposit that moves with the tenant. Tenants will provide landlords with a certificate confirming their deposit will be transferred over as soon as the previous lease is over. The aim of this is to create a fair and protected landlord-tenant exchange, limiting the risk of loss for both parties.
Abolish ‘No Fault Evictions’
The Conservatives want to abolish section 21, the form a landlord must give to end an Assured Shorthold Tenancy. The section 21 gives tenants notice to leave the property, however tenants are still within their right to stay after the notice expiry date. The RLA have argued removing section 21 means there must be a significant improvement for grounds-based possession to prevent landlords from leaving the sector.
There will be no increase in income tax, National Insurance or VAT. Furthermore, the Conservative government has promised tax cuts with the National Insurance threshold due to rise next year to £9,500 which will result in landlord savings of around £85 per year. The ultimate goal is to raise the threshold to £12,500 in upcoming years.
First Time Buyers
To be expected a majority of the housing initiatives pledged by the Conservative party focus on first time buyers. Expect to see long-term fixed rate mortgages and an extension of the Help to Buy scheme pushed from 2021 to 2023.
The Conservatives are introducing a 3% surcharge for non-UK resident buyers of residential property in addition to all other Stamp Duty Tax charges. The idea behind this new charge is to deter foreign investment in the Private Rental Sector, alleviating stress placed on housing stock supply for buyers intending to live there. ‘A recent study showed that 13% of new London homes were bought by non-residents in 2014 to 2016. This adds significant amounts of demand to limited supply, inflating house prices and making it harder for people in Britain looking to get a foot on the property ladder.’ Conservative manifesto 2019
Other noticeable changes to affect the housing market include continuing the roll-out of Universal Credit and bringing an end to the benefit freeze. The Conservatives also intend to invest £9.2 billion in energy efficient homes which should mean future changes in UK building regulations.