General Election 2015: The Last 5 Years & The Property Market

General Election 2015: The Last 5 Years & The Property Market

As parliament is dissolved, we look back at the coalition government and its impact on property investment.

This year, housing and the property market is a key election battleground, as the leading parties head off on the campaign trail following the dissolution of parliament. So how has the landscape changed over the last five years?

What has happened to your property investment since 2010?

The first coalition government since 1945, formed by the Conservatives and the Liberal Democrats, has overseen a number of key reforms that have affected the housing market and the private rented sector (PRS). Here’s what’s happened:

Capital returns

Since the last General Election, house prices have increased by 11%, with the average residential property in Britain now worth £188,566.

Buy-to-let yields

The amount a UK tenant pays each month has increased significantly since the last government, particularly over the last three years. In February 2012, the HomeLet Rental Index recorded the average rent at just under £750pcm. But that had grown by 19.9% in February 2015, with the UK’s average rent now £899pcm.

This continued growth has seen an increase in activity in the buy-to-let sector. In the last year alone, buy-to-let borrowing grew by £1 billion, with more investment expected in April once the new pension reforms come into force.

Help to Buy

In 2013, George Osborne announced the government’s new Help to Buy scheme. Targeting those that wanted to get onto the property ladder but struggled to save enough for a deposit, Help to Buy provides people with a 20% equity loan on property worth under £600,000, with the buyer needing to provide just a 5% deposit. As of May 2014, 7,313 homes had been sold under the scheme, with 80% of transactions from first time buyers.

Furthermore, the Chancellor announced in his final Budget speech in March 2015 plans for a new Help to Buy Isa. For every £200 saved to be used towards a deposit, the government will top it up by £50.

Stamp Duty

The 2014 autumn statement saw reforms to the Stamp Duty system, affecting home owners and buy-to-let investors. The tax, applicable when you purchase a property, is now applied in the same way as income tax, meaning that purchasers are no longer hit with a significant Stamp Duty amount if there property values happens to cross a particular threshold.

Build to Rent

In 2012, the government invested £1 billion into a Build to Rent fund. As part of creating “a bigger, better” PRS, equity funding was provided for developers to build private housing for the sector. By reducing their borrowing costs, the government hopes to see more homes built to keep up with the demand for rented accommodation in the UK.

Letting agents

The end of 2014 saw the government make changes to the way letting agents operated. Under the changes, letting agents now must register with one of three ombudsman or redress schemes. Supporting both landlords and tenants, it aimed to crackdown on the number of unregistered agents operating in the PRS.

What changes will the newly elected government bring?

As the campaigning for the General Election begins in earnest, so will our coverage. Check back to for news, features and analysis of how the General Election will affect investment in 2015.

What does a Conservative win mean for UK property investment?

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