ELECTION 2024: KEY CHANGED HOME-MOVERS WANT TO SEE

Thursday June 13, 2024

 

As the UK gears up for a general election, the question on many minds is how the outcome will impact the housing market. While an overwhelming 95% of those planning to move this year say their plans won’t be swayed by the election, it’s still crucial to consider what each party proposes for home-movers. Based on extensive research conducted by Rightmove, involving over 14,000 participants, estate agents, and housing experts, four key priorities have emerged. These include speeding up house-building, supporting first-time buyers, revising stamp duty costs, and introducing incentives to make homes greener.

  1. Accelerating House-Building and Supporting First-Time Buyers

The housing market is experiencing a supply-demand imbalance that has led to skyrocketing prices and rents. Buyer demand, measured by the number of people contacting agents on Rightmove, has increased by 15% since 2019, while the number of available homes has decreased by 6%. In the rental market, tenant demand is up by 32%, but available homes have dropped by 38%. This disparity has driven the national average asking price up by 22% over five years to £375,131, with advertised rents climbing 40% to £1,479 per month.

Tim Bannister, a property expert at Rightmove, emphasizes the need for smoother planning processes to expedite the construction of affordable housing. This not only aids first-time buyers but also provides opportunities for downsizers seeking greener homes with lower running costs. The Build-to-Rent sector has contributed to new developments, but the supply still falls short of meeting demand.

First-time buyers face significant challenges due to elevated mortgage rates, making it difficult to save for a deposit while paying rent and earning enough for mortgage approval. Matt Smith, a mortgage expert at Rightmove, suggests that reviewing mortgage affordability criteria could unlock greater affordability responsibly. Longer-term mortgage solutions and regulatory changes could provide more options for first-time buyers, ensuring stability and increasing accessibility to the property ladder.

  1. Revising Stamp Duty Costs

Reforming the stamp duty system is the top priority for homeowners and agents alike. The current structure, particularly in higher-priced regions, presents a substantial barrier to moving. While first-time buyers in England and Northern Ireland are exempt from stamp duty on properties up to £425,000, this relief is set to expire in April next year. Bannister advocates for making these changes permanent and suggests aligning stamp duty thresholds with regional property price differences to encourage more movement within the market.

  1. Green Incentives for Homeowners

Homeowners are increasingly calling for incentives to make their homes more energy-efficient. Legislation requiring landlords to upgrade homes to an Energy Performance Certificate (EPC) rating of C was recently scrapped, and there is a general lack of awareness about necessary changes and available schemes. Easier access to these schemes and recognition of the diverse needs of different homes could help overcome the financial barriers to making green improvements.

  1. Simplifying and Speeding Up the Home-Buying Process

The home-buying process remains notoriously complex and time-consuming, taking an average of over seven months from listing to moving. This drawn-out process creates stress and frustration for home-movers. Simplifying and accelerating this process is the second most requested change among homeowners. The next government should prioritize collaborating with the property industry to streamline home-moving, making it a less stressful and more seamless experience.

Election Impact on the Housing Market

Despite the general election’s potential to bring significant policy changes, the majority of home-movers appear undeterred. According to Tim Bannister, housing market activity is expected to remain steady in the lead-up to the election, mirroring past trends. Historical data shows that the housing market maintained stability during previous general elections in 2015 and 2019, with a notable bounce in activity post-election. For instance, buyer demand increased by 18% in June 2015 following the May election, and saw a 14% rise in January 2020 after the December 2019 election.

Looking ahead, Bannister suggests that a strong summer market could follow the election, especially if interest rates begin to fall. However, the specifics of any significant housing policies introduced will play a critical role in shaping market activity for the remainder of the year.

In conclusion, as the election approaches, the housing market remains a pivotal issue. The outlined priorities reflect the pressing needs of home-movers across the UK. Long-term solutions rather than short-term schemes will be crucial in addressing these needs and ensuring a robust and accessible housing market for all.