A Labour win spells danger for the property market

Property experts have warned that a Labour led victory at this year’s General Election could have a detrimental effect on the housing market, an opinion shared by Commercial and Residential Development Consultant, Richard Carr.

Rent controls will leave tenants worse off

One of Ed Miliband’s many proposals is to introduce three-year tenancies, with only limited rent rises permitted in that period, in line with inflation.

Richard Carr Ed Miliband

Labour leader, Ed Miliband

In response, two thirds of the UK landlords said they would leave the private rented sector, as the policy would limit the number of affordable rental properties.

The research was conducted by the Residential Landlords’ Association (RLA) and their chairman, Alan Ward, warned that the proposals will leave tenants with less choice in a market of dodgy landlords.

He said: “This is just window dressing and does nothing to address the supply side issues…or get rid of crooks. At a time when tenants need more choice over where they live, state-controlled rents would choke off supply, increase rents and reduce quality. It is a tax on tenants.”

Mansion Tax

Rokstone conducted research found that there are approximately 97,000 properties worth more than £2m in London.

The Mansion Tax policy could potentially disable the London property market and in Richard Carr’s view is very much a ‘vote winner’ policy.

Guy Meacock, head of the London office at Prime Purchase, a buyer agency, said: “The mansion tax pledge is a cultural shift, a tax on assets, which will send shock waves through the establishment felt most keenly in London.

“This could be the straw that breaks the camel’s back…we need to be very careful we don’t push people too far and seen to be anti-opportunity or, ultimately, investment will go elsewhere and into other asset classes.”

Under supply

During the last twenty years both the Tories and Labour parties have struggled to increase housing stock.

The Labour party’s proposed “Use it or lose it” policy is supposed to encourage owners of derelict buildings to use their planning permission to develop houses. The party proposes to charge fees or force through compulsory purchase orders on people ‘landbanking’.

However, this could potential slow down work rather than speed it up as some sites are commercially unviable for a developer. Experts agree that really redundant buildings should be dealt with by the local authorities.

Richard Carr says that Labour have not got a clue how can they stop people ‘landbanking’ there are so many strategic reasons why an organisation may be holding a piece of land, this just goes to show how naive they are!

One of the biggest problems that developers are now facing is the CIL (Community Infrastructure Levy), which will and is making a lot of sites economically unviable.

Especially when you add social housing costs, in other words development is being over taxed and the taxation is CIL, it is a blunt Instrument that was dreamt up by the last Labour party and should be repealed.

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