SPECIAL FEATURE: The race is on
So what are they promising to do for homeowners and those looking to get on the property ladder?
Given that affordability is an increasingly important factor for lenders now in the post MMR environment, all the parties have unsurprisingly made income tax a key battle line.
The Tories and Lib Dems are both in favour of raising the annual personal allowance from £10,000 to £12,500. However the Tories also plan to raise the 40% threshold to £50,000 by 2020 – a move clearly designed to attract middle-earners who fear drifting into the higher tax band.
If elected and if the economy is strong enough for a Conservative or Lib Dem government to carry raise the point at which we start paying income tax, it will help those on lower incomes and if the Tories get a majority and can raise the 40% threshold, this will deliver higher savings to those middle earners – arguably the main drivers of the housing market – although not for quite a while yet.
Labour, however, is proposing a return to the 50% top rate for those earning above £150,000 as well as reintroducing the 10p starting rate of tax. Its proposal to impose a ‘mansion tax’ on properties worth more than £2m saw the Conservatives immediately hit back, claiming that this could amount to a bill of £15,400 a year for the owner of a house worth £2m.
The Lib Dems who had previously proposed a similar policy appear to have abandoned their mansion tax for an extra 1% tax on homes worth £2m plus, incorporating it into the council tax system.
The Lib Dems also announced plans to build 300,000 houses a year and, showing remarkable confidence perhaps, have even identified possible locations already. They’re proposing up to five garden cities in Cambridgeshire, Bedfordshire, Buckinghamshire and Oxfordshire.
Extending the current Help to Buy mortgage scheme, the Conservatives propose to introduce a scheme that would allow first-time buyers under the age of 40 to buy a house at 20% below the market rate and that 100,000 new homes would be built for such people.
While slightly less specific than the Lib Dems as to where these homes would be located, the Prime Minister stated they would use brownfield land already identified for development in England only.
These homes would not be available to non-UK citizens or buy-to-let landlords, nor would they be able to be ‘flipped around’ for a quick sale.
Labour criticised the government but rather than announce any specific policy, simply pledged to make the fundamental changes required to the market to double the number of first-time buyers in the next 10 years.
So there you have it – whether the economy will be able to bear the cost of all the various proposals whichever party wins power next May remains to be seen. However, perhaps it’s not going to be the straight Labour-Conservative battle with the Lib Dems on the margins as many have predicted.
No sooner had the last conference drawn to a close, a tidal wave swept over the political landscape with the UK Independence Party gaining its first elected MP at Westminster.
As the party almost gained a second MP on the same night, perhaps Mr Farage’s claim that UKIP could hold the balance of power after next year’s general election isn’t such a bold claim after all.
And what this would mean for any of these policies is anyone’s guess!