Experts Predict a Disaster for Buy-To-Let Landlords

Many experts believe a Government led by Ed Miliband will wreak havoc on the attractive investment returns that many people now earn from owning a buy-to-let property – or a portfolio of properties. Mismanagement of the economy by a Labour Government, they say, could trigger interest rate rises and a sharp housing market correction, proving disastrous for buy-to-let investors. Eric Pentecost, Professor of Economics at Loughborough University, says: ‘Buy-to-let investors face several potential downsides on the horizon. They include a future rise in interest rates, a fall in house prices and political interference in the rental sector. A Labour administration would more likely bring these downsides much closer to home.’ Read more on the Daily Mail website.

Labour Will Start Construction on 1m New Homes By 2020

Ed Miliband has upped his offer on housebuilding by saying a Labour government will “start construction on 1m new homes by 2020” – an increase on the party’s pledge last year to build 200,000 home a year by 2020. The pledge, part of a package on housing held back by Miliband from the manifesto launch until the campaign itself, was combined with a pledge first made in 2010 but apparently dumped to offer a stamp duty holiday for first-time buyers on homes worth up to £300,000. Labour polling shows that offers to build vast numbers of houses annually do not play as well with voters as specific offers to help first-time buyers. Polling also suggests rent control is a popular policy. Read more on the Guardian website.

Miliband’s Pledge to First-Time Buyers Will Spare Them Stamp Duty

First-time buyers will be spared stamp duty and moved to the front of the queue for new homes under Labour plans to ease the national shortage of affordable houses and flats.  Claiming that millions of families are being priced out of the property market, Ed Miliband will commit a Labour government to scrapping stamp duty for 90 per cent of first-time buyers. For three years the levy would be waived on properties worth up to £300,000 for people buying their first home. Read more on the Independent website.

Labour Plot to End Right to Buy

Labour is trying to shut down the 'right to buy' policy by the back door, a minister has warned. Housing minister Brandon Lewis branded Labour the 'enemy of aspiration' over growing moves by the party to curb the right of people to buy their council home. Earlier this month, Ed Miliband's housing adviser Sir Michael Lyons described right to buy as a 'failure'. Welsh Labour has said it will restrict or even abolish the right to buy if it wins power in the principality next year. And a string of Labour councils have introduced moves in recent months that will curb the right to buy in the future. Read more on the Daily Mail website.

Right to Buy Failed, Says Miliband's Housing Guru

The man appointed by Ed Miliband to set out a plan to deal with Britain's 'housing crisis' has called the right to buy council homes a 'failure' and predicted it will end in five years. Sir Michael Lyons made the remarks as he introduced a meeting to discuss housing policies across the West Midlands. Sir Michael said: "We will see an end to the right to buy within the next five years and a recognition that it was a failure. It was introduced in the belief that it would lead to more home ownership and more people, through owning their own homes, investing in their communities. But homes sold under right to buy often ended up as rented accommodation." Read more on the Express and Star website.

Changing Council Tax Bands 'Could Raise £3.5bn More Than Mansion Tax'

Labour faces embarrassment over its mansion tax plans after an independent report found council tax reform would be ‘fairer’ and raise four times as much. Ed Miliband claims his flagship policy will raise £1.2billion a year on homes worth more than £2million. But the Centre for Economic and Business Research says it is ‘improbable’ that they would raise so much. Instead, it claimed that tweaking council tax bands, which have not changed for 25 years, would be a more ‘progressive’ way to raise revenue. Adding three extra brackets for high-end properties would generate an extra £4.7billion a year, it said. Read more on the Daily Mail website.

Miliband's Plan for Mansion Tax Draws Fire from Top Labour MPs

Ed Miliband is facing resistance from senior Labour MPs in London.  Former Labour local government minister, Nick Raynsford described the plan as "good politics but bad policy". He said what was urgently needed was a revaluation of council tax for the first time since 1991, to create extra bands for the highest-value properties as the basis for a "progressive" tax on property. Raynsford said the current system, under which people in properties worth just over £320,000 pay the same council tax as those in homes worth tens of millions, was "grossly unfair" and a "complete nonsense". Reform of council tax was the way forward, rather than a mansion tax, which would create many anomalies and be complex to introduce. Senior Labour figures fear that, under Miliband's plan, people who are "asset rich but cash poor" – having seen the value of their properties rise – will be unfairly hit by the new tax, with some being driven out of their homes. Read more on the Observer website.

Labour's Plans for Building New Homes

Speaking at the start of his party's annual conference in Manchester, Ed Miliband said that an incoming Labour government would introduce New Homes Corporations (NHCs) in an effort to boost housebuilding to 200,000 homes a year by 2020. The NHCs would work with private companies and housing associations in local authority areas already earmarked for development. Labour believes that, left unchecked, our national shortage of homes will become acute, hitting two million by 2020. Mr Miliband also pledged to tackle the problem of 'land banking' by extending local authorities' powers to withdraw planning permission from uncooperative developers. Read more on the Coalition Watch blog.

Miliband Pledges to Use Mansion Tax to Tackle Crisis in NHS

Labour would use the proceeds of a mansion tax on homes worth more than £2m to head off a funding crisis in the NHS. In his speech to the Labour conference in Manchester, Mr Miliband promised to save the NHS amid forecasts of a £30bn funding gap by 2020. Using some of the £2bn raised from Labour’s proposed high value property tax will be seen as a move to soak the rich rather than ask ordinary taxpayers to top up the health budget. Mapping out his 10-year “national mission” to transform Britain, Mr Miliband pledged that the number of first-time home buyers would be doubled to 400,000 a year under a Labour Government. Read more on the Independent website.

What’s Really Happening to Rents?

Are rents rising more slowly than house prices?  That’s what the figures from the Office for National Statistics suggest. Indeed, the ONS’s rental index suggests average rents have been rising below the rate of consumer price inflation, implying that they are becoming more affordable in real terms, not less. These figures were much cited when Ed Miliband proposed a mild form of rent control earlier this year. Critics suggested the Labour leader was, thus, addressing a non-existent problem. But HomeLet, which produces its own index of rent increases, has, for some time now, been reporting figures that tell a very different story. Read more on the Independent website.

Bedroom Tax Commons Vote To Be Forced Through

Labour aims to make Nick Clegg put government money where his mouth is and scrap the Bedroom Tax. Ed Miliband plans to force a Commons vote in the autumn on abolishing the hated charge. Last week the Liberal Democrats called for a major overhaul of the levy they had previously supported . A Labour motion for abolition after the 2013 summer recess was defeated by 252 to 226 votes because of coalition support. But if the Deputy PM now gets his MPs to vote with Labour – the housing benefit cut would have to be abolished. Read more on the Sunday People website.

Labour to Vote on Banning Letting Agent Fees for Tenants

On the local election campaign trail, Ed Miliband has just revealed his latest gambit. Labour will stage a vote on its recently announced proposal to ban letting agent fees for tenants (which the party estimates would save the average household £350). It will do so by tabling an amendment to the Consumer Rights Bill. Miliband said in his speech last week: “When you’re buying a home, the estate agent doesn’t charge you fees, but those who rent are given no such protection. They get charged up to £500 just for signing a tenancy agreement even if the letting agents are charging the landlord for the same thing too. A Labour government will ban letting agents from charging tenants.” Read more on the New Statesman website.

Labour’s Policies Put Housing Investment at Risk and Lack Crucial Detail

Outlined by Ed Miliband, Labour’s reforms to the private rented sector would introduce three year tenancies, enforce a ban on letting agent fees and impose a ceiling on rent increases.  However, responding to Miliband, the British Property Federation  (BPF) said his proposals lack crucial detail and also risk investment in housing, especially institutional investors.  Ian Fletcher, the BPF’s director of policy said: “Those who are investing already are very receptive to offering longer tenancies and many are doing so and the Labour Party’s aspiration on that is not objectionable, but the rent control aspect of this announcement makes no sense.”  Read more on the BPF website.

Miliband Drags Private Renting Into the 21st Century At Last

Ed Miliband rides to the rescue of ‘Generation Rent’ – taking the boldest of steps and bringing together a number of Labour’s big themes – by promising thorough reform of the private rented sector. For years now, people have been saying ‘something must be done’ about the private rented sector, and now ‘something’ is on the agenda. It’s the right thing to do, it’s audacious, it’s imaginative, and it’s not before time. And it will come under sustained attack from the Tories and from the less enlightened end of the landlord lobby. Already the lead Tory buffoon Grant Shapps has called it ‘Venezuela-style’. He has apparently never heard of Germany or Ireland, where rules similar to these have been successful and led to a much more stable private rented sector. Read more on the Red Brick blog.

Annual Rent-Increase Cap Is Focus of Labour Campaign Launch

A future Labour government would cap rent increases in the private sector and scrap letting fees to estate agents to give a "fairer deal" to tenants. Ed Miliband pledged to end "excessive" rent rises when he launched his party's campaign for local council and European elections. An "upper limit" on rises will be put in place based on average market rates.  The Labour leader also called for longer, securer tenancies and rental charges of up to £500 to be axed. But the Conservatives said evidence from other countries suggested rent controls lead to "poorer quality accommodation, fewer homes being rented and ultimately higher rents".  Read more on the BBC website.

Taxpayers to Fork Out Extra £1BILLION In Housing Benefit - Despite Bedroom Tax Misery

Taxpayers are to fork out £1BILLION more in housing benefit despite the misery caused by the Bedroom Tax, reveals the Sunday People. Iain Duncan Smith launched the hated tax a year ago to save £490million from the ­annual £24billion housing benefit bill. But figures from the Government’s own Office of Budget Responsibility forecast it will rise by £100million in the next financial year, £300million in 2015-16, £300million in £2016-17, £200million in 2017-18 and £100million in 2018-19. Labour leader Ed Miliband said: “The housing benefit bill is going up not down. Those forced out of their homes have to get more help to pay rent to private landlords instead of councils or housing associations.” Read more on the Sunday People website.

Housing Holds Key to Success at Next Election

Nearly a quarter of a million jobs will be created under a Labour government by giving greater freedom to smaller firms to build homes, the party will claim this week, as Ed Miliband sets the stage for Labour's 2015 election campaign.  Emma Reynolds, the shadow Housing minister, will unveil measures to guarantee access to land for smaller firms and custom builders rather than construction giants and say that up to 230,000 jobs could be created. Her speech tomorrow (14 January) is the first of five from the Shadow Cabinet in the next few weeks on how a Labour government would tackle the cost-of-living crisis, including a set-piece address from the Labour leader on the economy later this week. With just over a year to go before polling day, Mr Miliband intends to step up the "cost of living" campaign with fresh policy ideas on education, housing and jobs. Read more on the Independent website.

UK Housebuilders Counter Miliband's Land-Hoarding Claim

Britain's housebuilders have launched a scathing counter attack against Ed Miliband's claim that they are hoarding land for profit. The industry said plots are built on as soon as planning permission is secured, and argued that the 557% increase in profits among the nation's four biggest housebuilders this year comes from a very low base following the financial crisis. The biggest four developers by turnover – Barratt, Berkeley, Persimmon and Taylor Wimpey – have a collective land holding of almost 300,000 plots. A spokesman for the Home Builders' Federation (HBF), the industry's trade body, said: "Developers don't land bank, all the evidence is there. As soon as developers get a planning permission they want to start on site. Developers are not land hoarders." One major housebuilder said companies in the sector would be perceived as hugely risky and lose investment if they did not have sufficiently long land bank holdings of typically more than four years. Read more on the Guardian website.

Miliband Promises Drive to Double Rate of Housebuilding

Profiteering property developers that hoard land and councils that block developments will be swept aside in a "non-stop drive" to more than double the number of homes being built each year in England, Ed Miliband has promised. Attacking "stick-in-the-mud councils", the Labour leader said he would order a national planning inspectorate to give priority to local authorities that want to expand if they are being blocked by neighbouring councils refusing to release land. Under the Labour plans, councils would be empowered to compulsorily purchase land or charge fees if developers fail to build on land for which they have planning permission. Read more on the Guardian website.

The Reshuffle

Comments on the recent Government reshuffle from the Conservative Home blog:

Housing may be seen to have been demoted.  Mark Prisk, who has left the Government, was a fully-fledged Minister of State. By my count, the Department now has no Minister of State at all, and four Under-Secretaries: Nick Boles (Planning), Brandon Lewis (Local Government), Stephen Williams (Communities) and Kris Hopkins, who Departmental sources say will take the lead on housing.  I intend no disrespect to the latter by pointing out that the interest groups and others will inevitably see the loss of a Minister of State as a loss of status for housing itself. It is certainly an odd signal to send at a time when housing is a crucial political battleground, when Ed Miliband is fighting for its possession, and the Government is making such a push with Help to Buy.

Read more on Conservative Home.