Housing reforms to expect in 2020
As the nation digests the election outcome and the government's renewed agenda, we look at what this means for the housing market and how it might impact home owners, buyers and sellers in 2020.
Post updated: December 20th, 2019
Post updated: December 20th, 2019
Predictions for 2020 are starting to flood in. But what 2020 will bring for the housing market and house prices is harder to predict than ever.
A General Election is usually followed by a cabinet reshuffle. The housing minister job in particular is usually quite the revolving door; we’re currently on our ninth since 2010.
But for now, the current Secretary of State for housing, Robert Jenrick, remains in the Cabinet along with support from Housing Minister Esther McVey. Arguably, continuity in these roles can only be good news for delivering on housing policy promises, not least a new Building Safety Bill to ensure a tragedy like Grenfell could never happen again.
Here are some of the other main reforms and impacts on the housing market we can expect to see in the new year:
1. Leasehold reform
While leasehold wasn’t explicitly mentioned in the Queens speech, Robert Jenrick has confirmed this week that the government are “…moving forward with legislation to set ground rents to zero, abolish leasehold houses and prioritise the safety of residents with the biggest change to building safety laws for 40 years.” This is a welcomed, pro-consumer change to legislation.
But we hope reforms can go further. There needs to be a fairer system introduced. And there needs to be help for people stuck in leasehold properties, unable to remortgage or sell through no fault of their own.
2. A post Brexit bounce?
There’s no two ways about it, Brexit has brought with it a lot of uncertainty and distraction across the UK. And the housing market has undoubtedly suffered as people waited for more certain times before moving home.
The election result removes this layer of uncertainty for existing and aspiring homeowners who will now be looking ahead with more confidence. More political stability is likely to bring a release in pent-up buyer demand and, for some commentators, an early spring bounce to the housing market.
But there are still a few hurdles to jump. There’s a Budget to come, the “oven ready” Brexit deal to have done by the end of January and endless trade deals to be negotiated.
No one has a crystal ball – only time will tell what impact this all has on people’s home buying behaviour and house prices.
3. Stamp duty changes – but only for foreign buyers
One thing we will be pleased to see is a greater charge for foreign investors who are set to face a 3% surcharge in stamp duty land tax. This follows a 1% increase already made by the Government last year. The manifesto pledge claimed this will add £120 million to governmental coffers. There was no mention of this in the Queen’s speech though, so let’s see what happens next…
4. New housing schemes for first time buyers
As well as continuation of the Help to Buy scheme until 2023, first time buyers were promised a ‘First Home’ scheme in the manifesto, giving a discount on new homes in their local area.
The government has now announced it will consult on the plans which will allow councils to use housing developers’ contributions to discount homes by 30% for people who cannot otherwise afford to buy in their area.
The Affordable Homes Programme will also be renewed, building more homes for rent and delivering a new shared ownership offer.
The Conservatives also suggested in their manifesto that the use of long-term fixed rates could help to improve the options for first time buyers. Those with a 5% deposit could benefit from a guaranteed fixed rate mortgage solution which promises homebuyers a guaranteed mortgage payment throughout the lifetime of the mortgage. Again, the proposal was missing from the Queen’s speech so we wait and see…
5. More new build homes
The commitment in the Conservative manifesto was clear – an additional 1 million homes by the end of their tenure in 2025.
But here at the HomeOwners Alliance we continue to have concerns about the quality of newly built homes. Our campaign for better new builds calls for greater consumer protection.
We were pleased therefore to see commitment from the government for new legislation that requires developers of new build homes to belong to a New Home Ombudsman. We also believe this will be essential to mediate disputes between new homebuyers and developers, rather than forcing them to go to court.
- Do I need Home Buyers Protection Insurance?
- How much can I afford?
- Help to Buy Explained
- Stamp duty and buy to let