June 18

Election Sparks Fears of Housing Market Disruption


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Mortgage experts have expressed strong reservations about Reform UK’s housing and tax policies, arguing that while they may initially appear appealing, they pose significant risks similar to the financial fallout following Liz Truss’s mini-Budget in 2022.

Reform UK leader Nigel Farage has outlined several proposals, including repealing tax reforms that have been perceived as punitive towards landlords since 2015. Additionally, Farage advocates for eliminating stamp duty on residential properties priced below £750,000, with reduced rates for higher-value homes. The party also aims to scrap the Renters Reform Bill entirely and exempt approximately 98% of estates from Inheritance Tax obligations.

Critics within the mortgage industry warn that these policies could lead to unforeseen economic challenges, potentially mirroring the turbulence witnessed after Liz Truss’s budgetary decisions in 2022. They caution that while the proposals may seem attractive on the surface, the broader implications for the housing market and tax revenues could be destabilising. The call to repeal longstanding tax reforms and overhaul property transaction duties raises concerns about the fiscal sustainability and equity of the proposed changes.

As the debate continues, experts stress the importance of carefully evaluating the potential long-term effects of Reform UK’s policy agenda on housing affordability, market dynamics, and overall economic stability. The proposals have sparked discussions about the balance between stimulating property ownership and maintaining fiscal responsibility, highlighting the complexities involved in reforming housing and tax policies in a volatile economic environment.

In an interview with Newspage agency, mortgage brokers offered a range of perspectives on Reform UK’s policies.

Scott Gallacher, director at Rowley Turton, voiced significant concerns regarding the affordability of Reform’s proposed tax changes. He cautioned that such measures could potentially lead to a situation reminiscent of the Liz Truss mini-Budget debacle. Gallacher emphasized the potential ripple effects on interest rates and the impact on mortgage borrowers, pointing out uncertainties in how these policies would affect the broader economy. He also expressed doubts about the transparency of political parties in addressing the true state of the country’s finances, calling for more clarity in their proposals.

Amit Patel, an adviser at Trinity Finance, took a critical stance towards Reform UK’s electoral promises. Patel suggested that parties with minimal chances of gaining office might make sweeping pledges without practical feasibility. He remarked that voting for Reform could be perceived as endorsing policies lacking realistic implementation prospects. Patel underscored concerns about the potential consequences of such political rhetoric, describing it as fostering division rather than addressing genuine economic challenges.

These perspectives reflect the ongoing debate within the mortgage industry about the implications of proposed policy changes on housing affordability and economic stability. As the election approaches, stakeholders continue to assess the viability and potential risks associated with different political agendas. The comments from Gallacher and Patel highlight broader concerns about the impact of electoral promises on economic policy and public trust in political leadership.

Ben Perks, managing director at Orchard Financial Advisors, supports scrapping Section 24 for landlords, viewing it as a beneficial policy. He believes that allowing landlords to offset financial costs and mortgage interest could potentially reduce the higher rates and fees they currently face, leading to the possibility of lower rents for tenants—a welcome relief amid rising rental prices.

Rohit Kohli, director at The Mortgage Stop, agrees with the changes to Section 24 but expresses reservations about the feasibility of promises made by parties with minimal electoral prospects. He criticises such promises as headline-grabbing and unrealistic, drawing parallels to past policy debacles. Kohli highlights the importance of clear planning and funding for effective policy implementation.

Simon Bridgland, director at Release Freedom, comments on the impact of Reform’s housing contract. He suggests that regardless of personal opinions on the party, the announcement could sway public opinion leading up to the election. Bridgland speculates about potential shifts in voter favour towards the Reform Party and hints at internal political reactions within the Conservative Party.

And Colin Brown, Head of Planning & Development at property consultancy Carter Jonas, says: “Like the other parties, Reform is prioritising brownfield development by fast-tracking development proposals and providing fiscal incentives. The party acknowledges the need for planning reform and has referenced “loose fit” requirements for other large-scale residential developments but there is no clarification as to what this might look like in practice. 

“Reform’s contract is far shorter than other manifestos and contains a lot less detail. For example, there is no new homes target or comment on regional planning or the Green Belt. One senses it’s a rather rushed piece of work and Reform has other priorities which perhaps trump planning and housing.”



Election Sparks Fears of Housing Market Disruption, Mortgages UK, Reform UK

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