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Housing market has ‘dodged a bullet’ after Labour’s election disaster

Industry experts have hailed the Conservative’s majority in the general election and say the housing market has “dodged a bullet” as the UK avoided voting Labour into power.

The Conservatives achieved a comprehensive victory, winning 331 of the 650 seats being contested. Labour came second with 232 seats, followed by the Scottish National Party with 56, the Liberal Democrats with eight, Plaid Cymru with three, Ukip and the Green Party with one each and the other 19 seats going to a mixture of other parties.

The industry had raised concerns about Labour’s plans to introduce three-year tenancy agreements as standard with rent rises capped at inflation.

Labour also pledged to scrap stamp duty for first-time buyers purchasing homes worth less than £300,000, which critics suggested would boost demand but not increase supply, leaving these borrowers “worse off” because it is likely house prices would rise.  It also pledged to build 200,000 homes a year by the end of the next parliament.

The Tories, on the other hand, promised to expand Right to Buy to 1.3 million housing association tenants as well as introducing a Help to Buy Isa to help borrowers save for a deposit, as revealed in the Budget. They also pledged to build 200,000 homes for first-time buyers aged under 40 at 20 per cent discount and create a £1bn brownfield regeneration fund to unlock sites for 400,000 homes.

Moneyquest director Rob Clifford says: “We are pleased there is a level of continuity between the last government and the next, which we think is crucial for the markets we operate in.

“In terms of the lettings agency side of our business, we feel the result is a bullet dodged given the onerous regulation we could have expected from a government led by the Labour party. We fundamentally believe these measures would have failed to deliver the consumer benefits suggested and therefore it is a welcome move that the lettings sector looks highly unlikely to now be saddled with such measures.”

Fleet Mortgages chief executive Bob Young says he is relieved a party less likely to intervene in the buy-to-let market will be in power for the next five years.

He adds: “There are clearly a number of positives for the housing and mortgage market from this Conservative party victory, not least the fact that the Tories tend to be far less interventionist than the Labour party which means they are unlikely to meddle in the housing market, particularly the private rental sector.

“We are all acutely aware of the overwhelming need to build more houses in the UK, however the problem may be a lack of materials and manpower – many thousands of construction workers exited the industry back in 2008 and haven’t been replaced. Therefore the promises of more housing supply, especially those made by the Labour Party during the campaign, were simply not achievable.”

Countrywide chief executive Alison Platt believes the prime property market will now prosper as it is not faced with the prospect of a mansion tax on homes worth over £2m, which Labour planned to introduce.

She adds: “We anticipate this Conservative led Government to turn its attention from implementing policies that stimulated demand in the housing market to addressing the lack of housing supply. Sticking to its pledge to boost housebuilding through the provision of more affordable housing and more garden cities should prove welcome.”

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