According to Labour leaderEd Miliband: “Labour will start construction on 1m new homes by 2020”

 

Is it worth investing in a building a new property? Well according to an article in the Guardian recently it seems so should Labour be in power after the forthcoming election.

Here are the details but please click the link above to read the article in full.

 

ed milliband talking about building more properties by 2020The pledge, part of a package on housing held back by Miliband from the manifesto launch until the campaign itself, was combined with a pledge first made in 2010 but apparently dumped to offer a stamp duty holiday for first-time buyers on homes worth up to £300,000.

Research by the housing pressure group and homelessness charity Shelter shows that key marginal seats have seen a disproportionately high increase in the numbers of people renting accommodation.

Of the Ashcroft-polled seats, 56% are what the group describes as “housing hotspots” of very high unaffordability.

 

On Sunday, Miliband had pledged to cap rent increases within three-year private tenancies at the rate of inflation. Last year he promised only to restrict rent increases to the market rate. He has already offered a ban on letting agent fees (claimed to save renters £625 over the life of the parliament) and a national register of landlords.

Miliband said a Labour government would build 200,000 homes a year, including a “new generation of garden cities”, and would stop developers hoarding land that could be built on.

He added: “We won’t just build homes. We will make sure there is real priority for first-time buyers.

“It is simply too expensive for so many young people to buy a home today. Saving up for the deposit, paying the fees, and having enough left over for the stamp duty.”

The Liberal Democrats warned due to the vast spread of house prices across the UK, the offer to help with the purchase of properties worth up to £300,000 would provide little practical help.

Critics pointed out there would be scope for landlords to increase rents at the end of tenancies so giving them an incentive to get rid of existing tenants; a proposed exception for landlords who want to sell could create a huge loophole. Housing law specialists Nearly Legal understands there will be a six-month break clause that would have the same effect.

 

The proposal to cut stamp duty to zero over the next three years would benefit nine out of 10 people buying their first home and could save them up to £5,000, according to Labour.

The plan would cost £225m a year, which Miliband said would be found through a series of tax-related measures.

Reaction to the stamp duty proposal was mixed, and there was scepticism that his housebuilding increase could be adequately funded.

Campbell Robb, the head of Shelter, has called on all political parties to “put their money where their mouth is” when it comes to genuinely affordable housing.

“While reducing stamp duty may help at the margins, the only way to give Generation Rent a fighting chance of their own home is tackle the root causes of our housing crisis by building the affordable homes we desperately need,” he said.

David Orr, chief executive of housing association trade body the National Housing Federation, warned: “Slashing stamp duty could lead to even higher demand on homes for first-time buyers, pushing up prices even further out of reach, while not addressing the supply of homes we so desperately need.”

Jenny Luckett, policy officer at the campaign group Generation Rent, said: “These policies to cut stamp duty do nothing for affordability. They merely stimulate demand and drive house prices even further out of reach of ordinary first-time buyers. Limiting this policy to the first three years of government is a gimmick that will only further drive up prices as people scramble to buy before the ‘holiday’ is over. The money that would have gone to the Treasury in stamp duty, and could have been invested in housing building, will just go straight to the landlords.”

Jeremy Blackburn, head of policy at the Royal Institute of Chartered Surveyors, said: “While this proposed stamp duty reform could help some first-time buyers in the market, it’s another measure that tinkers with demand-side stimulus.”

The Residential Landlords Association (RLA) reminded Labour that their last government warned of the dangers of rent controls.

In a consultation on investment in private rented housing published in February 2010, the Treasury argued that when rent controls were previously in place they “reduced investment in the sector, contributing to … lower maintenance standards in the stock that remained.”

Alan Ward, RLA chairman said: “Labour’s plans would take use back to the dark days of the 1970s and 80s, which caused a shortage of decent homes to rent.”