First-time buyers could lose out under a Labour government

How would a Labour party victory in the General Election impact the property market?

A win for the Labour party in the General Election could spell trouble for first-time buyers, and their proposed mansion tax could have a knock-on effect on the whole market.

House prices have grown by an average of 11 per cent under the current Government - the equivalent of £26,372 per annum - and the average UK home value now stands at £264,934, according to research by Zoopla.

Initiatives such as planning reforms, various Help to Buy schemes, Funding for Lending and an extensive Stamp Duty overhaul have aided in the recovery of the British housing market, but these gains could be reversed by a Labour government.

Ed Miliband has revealed plans to restrict banks and buildings societies that accept deposits under the new Help to Buy Isa scheme and dictate how they lend these funds, which could lead to some banks pulling out of the Help to Buy ISA scheme altogether. This could limit the support offered to aspiring first-time buyers, and eventually kill off the initiative.

Additionally, the party’s proposed mansion tax will likely have significant consequential effects on the entire housing market, not just those properties valued at more than £2m.

The side-effects of the tax would include a reduction of prices at the top end of the market, as well as deterring foreign investment and driving increased competition for middle-class families below the threshold where there is already a shortage of stock.

Responding to the Labour manifesto, Lawrence Hall of Zoopla, said: “It seems likely that a Miliband win in May would have a negative impact on the UK housing market in the short to medium term.

“The Tories have paved the way for considerable strides in the property recovery, but the Labour proposals for a punitive tax on homes and restrictions on some of the first-time buyer support systems would create uncertainty and could well pull the rug out from under the feet of recovery and dampen market confidence.”

As a result of undoing some of the recent initiatives, there could be a fall in demand in property, which alongside an increase in supply from those fearing increased property taxes could lead to a potential sharp decline in house prices.

Housing schemes which could change the face of Swansea

Swansea councillors are set to discuss a number of housing plans Today.

Plans a river corridor 'catalyst'
 
PLANS for 67 houses and 26 flats at the former Bernard Hastie site would act as a "catalyst for further development and radically change the appearance" of the River Tawe corridor, Swansea planning officers have said in a report.

They have recommended Persimmon Homes's reserved matters application for approval.
The scheme already has outline planning permission, but there was criticism of the developer last year when it said it could not provide an affordable housing element that had previously been set out but not signed off.

It will, however, provide land and a £480,000 contribution for the much-vaunted Morfa Distributor Road, to be built by Swansea Council.

City leaders have wanted to develop the west bank of the River Tawe for years, and some housing has been completed.

Councillors are being asked to agree new terms with Persimmon Homes as part of any approval, requiring it to ensure new roads at the development site are up to scratch and properly maintained.

Scheme to cement presence in SA1

COASTAL Housing Group wants to build 22 houses and 27 flats in SA1.
If Swansea councillors rubber-stamp the recommendation for approval by officers, the properties will be built on two plots on Langdon Road, with the houses fronting the road and the flats behind.

Under the plans there is parking provision for one car per flat, plus six visitor spaces, and two spaces per house.

Coastal Housing will be expected to submit a travel plan to the authority, should the scheme be given consent.

The not-for-profit organisation bought the land from the Welsh Government for £720,000 last year.

It has previously said it would use high quality brick, landscape the site, and that the buildings would meet strict energy efficiency guidelines.

Coastal Housing has already built 69 affordable apartments and 79 retirement apartments at SA1.

Hospital site plans face opposition

LAND at Cefn Coed Hospital, in Cockett, would become a busy development site if outline plans for up to 73 houses are given the nod.

The site is bound to the north by the hospital buildings, to the east by Cockett Valley, to the south by houses in Lon Masarn and Lon Mefus, and to the west by houses in Maes y Gryffydd Road.

The main issues for councillors are the acceptability of residential development in terms of impacts on the character of the area, residential amenity impacts on neighbouring occupiers, and the impact of the development on parking and roads.

The authority has received 32 letters of objection about Abertawe Bro Morgannwg University Health Board's proposal, with traffic, drainage and other infrastructure pressures raised.

Officers have recommended approval, subject to the applicant contributing £206,358 towards education and ensuring a 30 per cent affordable housing provision.

UPDATED: What are the General Election promises on housing?

What do each of the political parties have to say about housing? We outline their policies.

Housing isn’t a key issue in the General Election. That’s what we’re led to believe at least. It’s all about the economy and the NHS, right?

But the launch of this week's election manifestos would suggest otherwise, with housing policies at their core. Whether it’s abolishing the bedroom tax or launching the latest initiative to help Britons buy their own property, each party is keen to reenforce the message that they can be counted on to safeguard our homes.

The Conversatives unveiled their election manifesto today with home ownership being at its core.
The Prime Minister David Cameron says he will extend the right-to-buy scheme so that 1.3 million council tenants can buy their homes at a discount.

The Conservatives have also pledged a fund to help build 400,000 new homes.

It comes on the back of the Conservatives having already announced its intention to offer first-time buyers under the age of 40 the opportunity to buy a home at a 20 per cent discount through the Starter Homes scheme.

Labour unveiled its election manifesto yesterday, pledging to build 200,000 new homes every year by 2020. The party will also introduce a cap on rent increases and create a national register of private landlords.

But its most controversial housing policy is the introduction of a so-called Mansion Tax on properties worth more than £2m.

The focus for Liberal Democrats is the creation of new garden cities in regions such as Cambridgeshire, Bedfordshire, and Oxfordshire. But for the SNP and Plaid Cymru, it is about opposing the so-called ‘bedroom tax’.

The Green party wants to abolish right to buy, and would also introduce a rent cap. It probably goes the furthest in helping those facing repossession by allowing those in financial difficulty to transfer ownership to the council and pay rent as council tenants. It would also seek to build half a million social rented homes by 2020 – something that would be paid for by scrapping the buy-to-let mortgage interest tax allowance. 

UKIP, meanwhile, wants to protect greenbelt land by building affordable homes on brownfield sites, using incentives such as tax breaks and low interest loans.

House prices boosted by a good supermarket

Living close to a supermarket can boost house prices by £15,000 as potential buyers are prepared to pay a premium for convenience, research showed today.

A home that is within easy reach of a supermarket typically costs 7 per cent more, the equivalent of £15,331 on average, than properties in other areas of the same town, according to Lloyds Bank.

But some supermarket chains have a bigger impact on house prices than others, with consumers prepared to pay most to be close to a branch of Waitrose, at an average of 12 per cent of £38,831.

Sainsbury’s is also popular, boosting property values locally by around 10 per cent or £24,507, while being near a Tesco typically adds a premium of 8 per cent or £17,124.

By contrast, property values are actually likely to be lower than comparable homes in the surrounding area if they are near a discount retailer.

Being close to a branch of Aldi typically knocks 3 per cent off a property’s value, while proximity to a Lidl store depresses prices by around 2 per cent.

Being near a Marks & Spencer or Co-op has the potential to boost property values by 7 per cent, but a branch of Iceland or Morrisons will only raise house prices by 4 per cent and 3 per cent respectively.

Having a local branch of Asda appeared to have no impact on nearby property prices at all.

Andy Hulme, Lloyds Bank mortgages director, said:“It’s easy to assume the effect of different factors on the value of a property but this research enables us to clearly see that there is a significant association between the convenience of a local supermarket and house prices.

“With homes in areas close to national supermarkets commanding an average of over £15,000 more than those in the surrounding areas, having a grocery shop within easy reach appears to be high on the list for homebuyers looking for good access to local amenities.” 

Being close to a supermarket had the biggest impact on house prices in the West Midlands, with homes in areas with a Waitrose costing an average of 37 per cent or £66,130 more than properties that were not close to one of the supermarket’s branches.

Proximity to a Waitrose also had a big impact on house prices in the north west, boosting them by 33 per cent or £63,921, and London, adding 14 per cent or £76,188.

What proposals do the main Political Parties have for the housing market?

With less than five weeks to go until the General Election, have you decided yet who you will vote for?

If you haven't, here is a handy guide from the Council of Mortgage Lenders to help you make up your mind. It outlines the housing policy of each of the main political parties, covering everything from their stance on the rental sector and affordable housing to owner-occupation.

The Conservative’s proposals

• Like most of the other parties, they want to increase housing supply. Would like to see the annual construction rate to rise to 200,000 homes by 2017, and the construction of 200,000 starter properties for sale to first-time buyers aged under 40 at 20% below market rate.
• Keen to realise the potential of alternative methods of construction and off-site manufacture to increase housing supply and reduce costs, and to create more opportunities for people to custom-build their own homes.
• Wants to extend the Help to Buy equity loan scheme for newly-built properties until 2020, introduce the proposed Help to Buy ISA, and a Rent to Buy scheme offering discounted rents and an opportunity to buy for social tenants. Would like to continue support for the Right to Buy scheme, and make it easier to sell on properties in shared ownership.

The Labour Party

• Has identified housing as one of six goals in its 10 year plan. Wants to build at least 200,000 homes annually and see the number of first-time buyers double by 2020. Would like to increase competition in the construction sector, and encourage the expansion of smaller building firms.
• Believes local authorities should have a mandatory local plan to meet housing need, with new powers to build on designated land quickly, to charge developers for not building when planning permission has been granted, and to designate new housing growth areas. Also wants incentives to deliver new garden cities, and to fast-track planning on small sites.
• Wants to devolve £6bn a year in housing, infrastructure and transport funding to local authorities. Also proposing powers to give priority access to local buyers, and to prevent homes being sold for buy-to-let, or being left empty.
• Plans to introduce a "mansion tax" on properties worth more than £2m, and to re-instate the spare room subsidy.
• Supports the simplification of financial products, with lenders required to send annual updates explaining how borrowers’ payments will change if interest rates rise, and favours a free financial guidance service. 
• Wants “ring-fencing” of high street and investment banking, and possibly full separation of these two operations.
• Wants to introduce three-year tenancy agreements in the private rented sector, with restrictions on rental charges and reviews, and on letting agents’ fees. Would like privately rented properties to meet a decency standard by 2027.

The Liberal Democrats

• Would like to raise the annual construction rate to 300,000 homes, with a ministerial task force setting out in the first year of a new parliament how this will be achieved. Wants to introduce higher council tax bands for higher value properties. Favours the release of public land through ‘build now, pay later’ deals, and prefers ‘help to build’ over Help to Buy. 
• Address restrictions caused by land-banking through a competition review of the building sector, plus community land auctions and ‘use it or lose it’ planning consents. Supports the introduction of powers to control the number of second and empty homes.
• Favours greater local autonomy through ‘devolution on demand,’ and grassroots support for local plans setting out housing need. Would like local authorities to have power to suspend the Right to Buy, but wants to introduce a new ‘rent to own’ scheme, under which tenants can become full owners without taking out a mortgage.
• Improved protection from rogue landlords in the private rented sector, plus the introduction of ‘family friendly’ tenancies and minimum energy performance standards for rented properties.
• Supports pension reform and the provision of free financial guidance, with the possibility to expand the scope of this further. Also wants ring-fencing of banks, perhaps with full separation of retail and investment banking operations.

The United Kingdom Independence Party

• Wants to protect the green belt, but make it easier to build on brownfield sites. Government to list nationally available sites for development, and to issue low-interest bonds to fund land decontamination. Exemption from stamp duty for the initial sale of newly-built homes on brownfield sites, as well as incentives through VAT.  Stronger powers for local people to overturn proposals for large-scale development.
• Change the points system in the social housing sector to prioritise ex-servicemen and women.  Restrictions on Right to Buy for foreign nationals, unless they have served in the armed forces.
• Wants to re-instate the spare room subsidy, but supports a streamlined welfare system and benefits cap.

The Green Party

• Abolition of the Right to Buy, and the construction of 500,000 new social rented homes by 2020. Powers to bring empty homes back into use and convert empty municipal buildings, where appropriate. Councils to be able to borrow money to build homes or buy them on the open market.
• Borrowers unable to continue to meet their mortgage commitments to be able to transfer ownership to a local council, and pay rent as tenants.
• Scrapping of the tax allowance on mortgage interest for landlords, greater security for private tenants and rent caps.  Introduction of a rent commission to “bring rents back into line with incomes,” and landlords to improve the energy efficiency of homes.
• Abolition of the welfare cap, and a re-balancing of economic prosperity in the UK to reduce demand in London and the south east.

The Scottish Nationalist Party

• Priority for affordable housing and an extension of its record of providing council houses through the Scottish parliament. Implementation of new measures to scrap the Right to Buy for new council homes in Scotland.
• Re-instatement of the spare room subsidy, and opposed to cuts in in-work benefits.

Plaid Cymru

• Extend HomeBuy to help first-time buyers and allow “people to buy houses in their town or village.” Reform of the home-buying process, so that legal fees are paid by the person withdrawing from a house sale, not the purchaser.
• Higher council tax charges on second homes, particularly where ownership of them makes it harder for local people to buy. Improvements to environmental performance of homes through a Green New Deal, and lower VAT on house repairs.
• Introduction of rent controls, enhanced rights for tenants and a study of how savings from housing benefit and additional borrowing powers could support the construction of social housing. Measures to bring empty homes and other suitable buildings back into the housing stock.

The Democratic Unionist Party

• Help for first-time buyers, with a home loan scheme for graduates in subjects needed to improve the economy. Promotion of shared ownership, with more opportunities to part-own and flexibility to change the share of the property owned by the occupier. Wants to examine schemes to help borrowers with mortgage problems, and provide practical advice and support.
• Supports an early decision on the fundamental review of the Northern Ireland Housing Executive, separation of strategic and landlord functions, and measures to make social housing more self-financing.  Plans to work with housing associations to provide more affordable homes. 
• Wants a Northern Ireland Housing Forum involving all housing providers and relevant government departments. A better balance between funding newly-built property and maintaining existing social homes, and wants to explore setting up a single regulator for the whole housing sector.
• Supports certainty on Housing Executive rents, with revenue used to re-instate properties, maintain homes and promote energy efficiency.  Wants to introduce a light touch, mandatory register for private landlords.

Your Agent Property Blog: Average two-year fixed rate mortgage falls below 3...

Your Agent Property Blog: Average two-year fixed rate mortgage falls below 3...: It is the first time the average cost has dropped below the 3 per cent barrier for all borrowers, regardless of the deposit size. Mo...

Average two-year fixed rate mortgage falls below 3%

It is the first time the average cost has dropped below the 3 per cent barrier for all borrowers, regardless of the deposit size.

Mortgage rates are continuing to tumble with the average cost of a two-year fixed rate deal falling below 3 per cent, figures showed today.

Competition on the high street remains intense, with five lenders offering fixed rate mortgages of less than 1.3 per cent, according to financial information group Moneyfacts.

The latest round of cuts follows a further drop in swap rates, upon which fixed rate loans are based, as the prospect of a rise in the Bank Rate recedes.

The average cost of a two-year fixed rate mortgage has fallen by eight basis points during March to stand at 2.98 per cent.

It is the first time the average cost of one of the deals has fallen below the 3 per cent barrier for all borrowers, regardless of the size of the deposit they have to put down.

It comes weeks after the average cost of one of the loans for people with a 40 per cent stake fell below 2 per cent to 1.99 per cent.

The average rate for this loan-to-value ratio (LTV) has since fallen further to 1.92 per cent.
The drop in rates has been steepest for people with only small deposits.

The typical cost of a two-year fixed rate deal for people with only a 5 per cent deposit has dropped by nine basis points since the beginning of the month, while loans for those with 15 per cent to put down have fallen by 0.17 per cent.

Sylvia Waycot, editor at Moneyfacts.co.uk, said: “The drop to zero inflation has resulted in the constant speculation of a Bank of England base rate rise being kicked to the kerb for the time being.

“Removing that concern has made it easier for lenders to drop some rates in order to be more competitive.

“As remortgage lending figures are still depressed due to many borrowers being happy on current standard variable rates, the competition for the limited number of new borrowers is intense, hence the fall in rates for higher LTVs.”

Yorkshire Building Society currently has the lowest two-year fixed rate mortgage on offer at 1.18 per cent for people borrowing up to 65 per cent of their home’s value who pay a £1,369 fee.

It is followed by Chelsea Building Society and the Co-operative Bank, which both have rates of 1.24 per cent, at LTVs of 65 per cent and 60 per cent respectively.

Meanwhile, Post Office Money is offering a two-year deal at 1.25 per cent, while HSBC has one at 1.29 per cent, with both rates available to people with at least a 40 per cent deposit.

The Co-operative Bank also has the best buy deal for people with only 10 per cent to put down, offering a rate of 2.89 per cent, with a £999 fee.