The New Government's Mission: Tackling the UK's Housing Crisis

The UK General Election has ushered in a new era with the Labour Party securing a landslide victory, ending 14 years of Conservative rule. This fresh leadership, inspired by the proactive spirit of Clement Attlee, is set to tackle the pressing housing crisis with a strategic approach.

Housing Reforms on the Horizon

Labour’s ambitious manifesto promises sweeping changes to the housing sector. They plan to overhaul planning rules and set stringent targets for new home construction. Significant reforms in the private rented sector (PRS) are also on the agenda, alongside long-term schemes designed to help young people step onto the property ladder. Additionally, local councils will be empowered to take over empty commercial premises, repurposing them to meet housing needs.

Tax and Benefit Reforms

Within the first six months, the new government pledges to consult on business taxation and unveil a comprehensive roadmap for change. This includes replacing the current business rates system with one that creates a level playing field between online and physical businesses.

Labour has also promised to maintain the corporation tax cap at 25% for this parliamentary term and to review Universal Credit. Propertymark, a key industry body, is urging the government to recognize landlords as small businesses, allowing them to claim 100% of their mortgage interest on tax returns. This follows the removal of mortgage interest relief in 2015, which significantly increased costs for landlords, deterring investment in the private rental sector.

Addressing the ‘Tenant Tax’

Section 24 of the Finance Act, often referred to as the ‘Tenant Tax,’ has placed a higher tax burden on landlords, reducing their profit margins and pushing up rental costs. Despite landlords' efforts to keep rents affordable, rising interest rates have forced many to increase rents to cover expenses.

Efficiency in the Justice System

Landlords and letting agents are calling for a more efficient, cost-effective justice system to address property disputes. A swift and reliable process is essential for the success of the lettings industry. While a preventative approach to dispute resolution is encouraged to help tenants maintain their homes and ensure continued rent payments, the current system falls short in providing landlords with a dependable route to reclaim their properties when necessary.

The Labour Party’s comprehensive approach aims to address these issues, ensuring fair treatment and support for both tenants and landlords. By fostering a balanced and proactive housing market, they hope to create a sustainable future for all.