What will the election mean to the property market?

This election could mean boom or bust to the already fragile property market in the UK.

As we all know, possibly the largest challenge facing the new government will be our economy. The 3 big parties have outlined the steps they will take to try to deal with the £170bn deficit in the UK’s finances.

With it looking increasingly like a hung parliament, what will be the main points of debate from these parties on our property market?

Listed below are some of the key points of each party.

Conservative:

• Scrap home information packs
• Keep the £250,000 stamp duty threshold for the foreseeable future
• Add a new 5% stamp duty threshold for £1m properties from April 2011
• Increase inheritance tax threshold to £1m
• Regards Northern Rock, they have not stated whether they will consider remutualisation
• Include more local initiatives rather than large scale regional building plans
• Will look to split state and part owned banks into 2 parts, retail and investment

Labour:

• Add a new 5% stamp duty threshold for £1m properties from April 2011
• Keep the homebuyer direct scheme for low earners
• Keep Home Information Packs
• The £250,000 stamp duty threshold is due to expire in March 2012
• 10,000 affordable homes to be built a year by 2014
• Northern Rock: Manifesto pledge to consider remutualisation as an option, ‘while ensuring the sale generates maximum value for the taxpayer.’
• Will look to break up large banks but probably not into retail and investment
• Maintain the standard interest rate on the Support for Mortgage Interest Scheme at 6.08 per cent until December 2010.

Liberal Democrats:

• Charge VAT on new homes
• 1% “supertax” on homeowners with properties worth over £2m.
• Create a new “Safe Start” mortgage that keeps buyers from slipping into negative equity
• Propose a green loan for people to invest in home energy efficiency and micro-renewables
• Get rid of home information packs and keep energy performance certificates
• Consider remutualisation regards Northern Rock
• Will split state and part owned banks into retail and investment
• Concentrate on local rather than large regional building plans.

Fresh Invest is a property investment company with the aim of maximising our investor’s funds whilst minimising their risk. For more information see www.freshinvest.co.uk or phone 0800 043 69 56.