The polls suggest that Jeremy Corbyn may well be announced as the new leader of the Labour Party – but what policies does Jeremy advocate that could affect the property markets? Jeremy would like to see the introduction of rent controls, far greater affordable or social housing requirements for developments, “people’s quantitative easing” and restrict the sale of public assets.
The idea of a greater number of affordable or social housing is a contentious point. On one side there would be a greater supply of affordable housing which some argue is much needed, but on the other hand, increasing affordable and social housing could jeopardise the supply of development sites, and therefore housing stock due to developers acting purely on site viability and therefore overlooking some credible development sites for these which might be more profitable. This is something that Woolley is currently working to overcome on a large development site which is not currently attracting developers due to the Council’s proposed numbers of affordable housing as well as other significant matters.
In response to this, Brandon Lewis recently stated that the Conservative Party are committed to delivering 275,000 additional affordable homes by 2020 which they seem confident of achieving. The government aim to meet these targets through their Affordable Housing Guarantee Scheme which has already helped to provide over £1.25 billion in investment to support more than 11,000 additional affordable homes. The government is also providing £150 million of loans to kick-start regeneration of social housing estates with four schemes approved so far.
Jeremy Corbyn also proposes quantitative easing to fund extra infrastructure spending and build homes. In the short run this might sound a pleasing idea as it could employee thousands, bring much needed money to areas deemed in need of infrastructure investment and provide growth and increase productivity. However, the UK economy is steadily growing again and any large interventions could bring about medium to longer term problems such as inflation – hence none of the Bank of England’s Monetary Policy Committee members currently back quantitive easing.
In other news Barratt Homes has seen its profits rise by almost 45% to £565.5 million. The jump in profits has been attributed to improving mortgage availability and the government ’s support through the Help to Buy scheme. Barratt has said that UK average house prices had risen by 8.7% to £262,500 over the past year. This is clearly an indicator that there really is still a huge demand for and lack of supply of new houses in the market. However, I do wonder if part of the explanation for these increased profit levels is where landowners might not getting the satisfactory level of advice to safe guard themselves from the developers and their ways of creating legal agreements, which really do not financially benefit landowners and communities as much as they should in many cases. Beware!