"Whatever the outcome this Friday, it’s clear the result will have a knock-on effect for your customers, on your business, and for us at Hodge as a UK lender."
As we went into the last General Election in December 2019 no one could have predicted the turbulence we would have seen almost as soon as we had made our choice. In 2019 it was the after-effects of Brexit and a stark choice between the major UK political parties. Now having had three Prime ministers, the country still dealing with the Covid effect, especially in the NHS, all combined with societal pressures due to the cost-of-living crisis, this is an election of where a change in direction, whoever wins, seems inevitable.
Both lenders such as ourselves and intermediaries have a responsibility to stay across any national leadership race and the subsequent impact it may have on our clients.
Given the UK’s performance in recent years the economy has continued to take centre stage and will likely be a key issue in many people’s minds when it comes to voting time - but working to guide your highly valued customers through the economic turbulence and lead them into a steadier life beyond the fray of this election can understandably feel like a stretch at times. And yet, the past few weeks have reminded us the state of the economy and the effect UK politics has on the way we spend, borrow and save our money as businesses, investors and individual consumers is always relevant.
During this General Election more than ever brokers and IFAs need to know what each party is promising in their manifestos, and what impact these promises will have on the future of the mortgage and property markets.
Both main parties have stated their commitment to solving the housing crisis. There isn’t much to separate the political parties in terms of the overall need to build new homes. Labour has vowed to introduce new mandatory housing targets and build 1.5 million homes over the next parliament, while the Conservatives say they will deliver 1.6 million well-designed houses in the right places to protect the countryside.
Changes to the planning system are a key part of these plans and might also have an effect on clients looking to remortgage or extend their mortgages, and again, both main parties have plans to reform in this area.
Labour plans to tackle delays in the planning system by funding additional planning officers, has vowed to take tough action on making sure planning authorities have up to date local plans and favour sustainable developments as well as reusing existing property as much as possible to increase the number of residential properties available and improving affordability of home ownership.
While the Conservatives have announced they’ll provide a fast-track planning route for new homes on previously developed land in the 20 largest cities in England, with councils also required to set land aside for local and small builders.
There are also key difference on support to finance homes. Labour has said it will launch a permanent mortgage guarantee scheme, empower the Bank of England to keep inflation and interest rates low and the OBR to cost every fiscal event to avoid a repeat of the mini budget.
The Conservatives plan to continue its own guarantee scheme, restart Help to Buy, as well as making the current first-time buyer temporary stamp duty relief on homes up to £425,000 permanent.
What is also important to be aware of is that housing is a devolved power and as such all these changes are going to be applicable to England, with different policies and approaches in the devolved nations such as here in Wales. It can all be a lot to unpick! But, whatever the outcome this Friday, it’s clear the result will have a knock-on effect for your customers, on your business, and for us at Hodge as a UK lender. Regardless of what your personal politics may look like, it’s always imperative we’re aware of what changes are being made to the mortgage, housing and planning system by the winning party, so we can properly inform our customers of the best route for them, not only for the immediate future, but for years to come.
