What the Newly Elected Government Could Mean for the Industry
The Conservatives took a majority of 80 seats last week, making gains in Labour heartlands across the North in particular. Brexit is obviously firmly on the mind of the Prime Minister and repaying the faith of many first time voters; “I’m humbled that you have put your trust in me and you put your trust in us. I and we will never take your support for granted.”
However, what could this government mean for the property industry?
During campaigning, the Conservatives announced foreign buyers in England will be forced to pay 3% more in stamp duty than UK residents. They had already announced plans for a 1% levy on stamp duty for non-UK tax residents in February. But a study for Labour’s London Mayor Sadiq Khan said the figure was not high enough, pointing to other cities with large numbers of foreign buyers including Vancouver and Singapore, which both have a 20% surcharge.
The Conservatives are now proposing a surcharge of 3%, to be paid in addition to all other stamp duty charges. They estimate the measure will affect about 70,000 transactions per year, raising £120 million, which the Conservatives would direct to programmes tackling rough sleeping.
Under the Conservatives since 1997, planning permission rates have stood on average over 50%. Interestingly most frequent approvals were during the Conservative-Liberal Democrats coalition with just under 70% of applications signed off. Compare that to the Blair and Brown Labour governments which were just over 40%.
During the nine years, the Conservatives have been in power, more than 50% of permissions have been signed off in 3 months, compared to when Labour was in power and granted 30% of applications in the same time period.
Interestingly the data shows, there is little difference between the three major parties when it comes to the types of applications being approved. Taking out the London constituencies a change in the government from Labour to Conservatives is likely to see an increase in permission rates in a constituency by an average 16%. Compare that the other way from Conservatives to Labour and it’s likely to see an average 8% decrease in permission rates.
No surprise in the run-up to a General Election, permission rates peaks during the three months before.
Taking the London constituency, there seems to be no clear correlation between the levels of deprivation and the level of planning permissions granted.
Looking at all these stats a Conservative led government will give developers hope for approval on their plans. They also pledged measures to help first-time buyers and boost private house building, promising a million homes over the next five years.
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