As we approach the next general election on 8 June we will see promises and counter promises regarding planning permission, property taxes and an array of other issues to do with the UK property market. From the national government right down to local councils everybody seems to have an idea how to improve the property market but for some strange reason these ideas only emerge when the political parties require your vote. So, is the UK property market used like a political football?
Many ideas never see the light of day
As we see in all elements of political life, many of the property market ideas floated ahead of general elections never see the light of day. Indeed many suspect that the majority of these ideas are only introduced to grab the headlines and try to increase the vote count of the underlying political parties. If we were to count the number of times we have been promised “a catch-up period on newbuilds” we can only imagine where we would be up to now. Many of these promises are simply repeated further down the line as “new policies” when in fact the original policies were never acted upon.
Tinkering at the edges
If you take a step back and look at the UK property market there is no doubt that an ever-growing requirement for newbuilds is not been fulfilled by the government and the building companies. Many will issue headline grabbing statements which will “tinker at the edges” but when it comes to digging deep to find the billions of pounds required to even begin to catch up on the required rate of newbuilds per annum very often the funding is nowhere to be seen.
When you bear in mind the fact that over the last couple of years we have seen a major shift in the taxation situation for the buy to let market, how does this help the UK market going forward? Every added cost for a buy to let investor means a reduced return and ultimately many investors will stop looking towards these areas. At a time when the UK needs private sector funding for housebuilding more than ever, the UK government seems determined to tax investors to the hilt and do its very best to push them away.
There are obvious areas of the UK property market which will from time to time become overheated and require an adjustment in regulations to control the supply/demand balance. These are justified moment when politicians should and do become involved in the UK property market but on many other occasions their actions are unwarranted and often turn out to be counter-productive in the longer term. Perhaps there should be some kind of hold on property market policies during critical political times such as local and general elections to ensure that it is not used as a political football?
Some might suggest that politicians like the idea of making themselves feel “important” by adding a whole array of additional taxation and regulation to the UK property market. At the end of the day, any wholesale changes made to what is to all intents and purposes a free market can be dangerous not just to sentiment but also future investment levels.