UK political parties outlined their plans to tackle what they all accept is a UK housing shortfall at their party conferences over the last two weeks, proposing policies which could have a major impact on the UK real estate sector.
Prime minister Theresa May announced in her conference address that the UK government will lift the local authority borrowing cap in its entirety to boost housebuilding, potentially leading to an additional 15,000 new homes a year and an extra £1 billion of borrowing.
She went further by confirming that foreign buyers could face a surcharge of 1% or 3% on top of the current rate of stamp duty, a move which has already had an impact on developer share prices.
In a similar vein, Liberal Democrat members overwhelmingly backed a motion to give local authorities the power to increase council tax levied by up to 500%, where homes are being deliberately bought for investment opportunities and left empty for long periods.
On an apparent election footing, Labour's shadow housing secretary John Healey delivered a speech that promised that the next Labour government would be the "most radical government on housing" in the post-war period. Healey announced that Labour will set up a "fully-fledged" housing department to fix the housing crisis if it is elected.
Meanwhile, Labour's shadow planning minister Roberta Blackman-Woods promised a "root and branch rethink" of the UK planning system, to deliver a "system of local plan making that is genuinely democratic". This work will be led by a commission with a consultation formally commencing later this month. This comes hot on the heels of the publication of the new National Planning Policy Framework (NPPF) in July this year and begs the question realistically how much bandwidth or appetite there is in the system for a further overhaul, particularly with Brexit issues taking the lion's share of parliamentary time.
Labour also pledged to "reinvigorate" the UK's high streets, with shadow business, energy and industrial strategy secretary Rebecca Long Bailey announcing a five point emergency plan which would include a "fundamental review of the business rates system to bring into the 21st century". She said that Labour will introduce annual revaluations and implement a fair appeals system. This will be a move which Labour will hope addresses the apparent tax imbalance between 'bricks and mortar' and online retailers.
With this year's party conference season heralding the start of what is expected to be the most tumultuous political six months in living memory, it was understandable that Brexit would take centre stage. However, the consensus across all major parties to address the UK's housing shortfall was plain to see and significant change should be expected on this front too, even if it has to compete for political airtime as we approach Brexit.
Tom Johnson is a real estate expert at Pinsent Masons, the law firm behind Out-Law.com
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