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Labour v Conservative Housing Policy - an analysis

“When it comes to housing policy, there is little difference between the two major parties” says Aneisha Beveridge, head of research at Hamptons.

“Both are fighting for the centre ground with a focus on helping more people become homeowners.  To meet that goal, both parties have set out plans to build more homes, offer a mortgage guarantee scheme to help people with low deposits into homeownership and clamp down further on landlords.  And it’s the rental market, in particular, that could see the biggest change, particularly if the polls are right and Labour win a majority.

“We saw in the local elections that much of the shift from the Conservatives to Labour came from mortgaged households, and that’s likely to play out in the main vote, too.  But with little substantial housing policy on the table, it’s people's finances and the path of mortgage rates, the latter primarily controlled by the Bank of England rather than the government, that will dictate how people feel.


“While there are no signs that demand for housing has dipped in the run-up to the election so far, as always, confidence and clarity are key for the market in the long term.  Most new governments tend to come with a honeymoon period when simply being different from the previous one is enough to generate a feel-good factor.  This, alongside greater clarity about future plans, should improve confidence, which means we expect the second half of the year to come with a boost that should extend into the housing market.

“The relatively high level of political instability in recent years has heightened the level of uncertainty for many investors, small businesses and even individuals.  Rather than developing a long-term strategy for stamp duty, corporation tax and capital gains, as well as the tax and regulatory environment for second homeowners and landlords, there has been near-constant tinkering with the rules and rates in different directions. For many, this has made long-term business planning tricky and needs to be a key consideration for the next government.”


Conservative Policy: In their 2024 manifesto, the Conservatives pledged to deliver 1.6 million homes in England in the next Parliament. When the 2023 data is released, they are expected to meet their 2019 manifesto pledge of building one million homes during their parliament. Net additional homes totalled 935,204 over four years to March 2023.

Their headline policies are:

- Introduce a new and improved Help to Buy Scheme.  This will enable first-time buyers to purchase a new-build home with a 5% deposit using a 20% government equity loan. The scheme will be partly funded by housebuilders, and we await more details. 

- Continuation of the Mortgage Guarantee Scheme to help increase the availability of 95% LTV mortgages.

- Prioritise housebuilding on brownfield sites and raise density levels in cities.  The party’s proposed ‘brownfield presumption’ will mean that if housebuilding drops below expected levels in Britain’s 20 largest cities and towns, it will be easier to get permission to build on previously developed brownfield sites.

- Support local and smaller builders by requiring councils to set land aside for them and lifting Section 106 burdens on more smaller sites.

- Renew the Affordable Homes Programme to deliver homes of all tenures.

- Support those who want to build their own home by simplifying the planning process, while also supporting more community housing schemes.

Labour Policy: Early signs suggest housing may lie higher on the Labour Party’s agenda than it has been in the run-up to most previous elections.  This raises the chances that housing will sit closer to the Prime Minister and Treasury than it has under previous governments.  Their manifesto outlined an ambition to build 1.5 million new homes over the next parliament.

Their headline proposals are:

- Restore housing targets: by updating the National Policy Planning Framework and ensuring planning authorities have up-to-date Local Plans. 

- First dibs for first-time buyers: giving younger people the first chance to buy homes in new housing developments and offering a government-backed mortgage guarantee scheme (Freedom to Buy). 

- A housing recovery plan: a blitz of planning reform to quickly increase housebuilding to buy and rent.  Plans to hire 300 new planning officers and enhance local voices on ‘how’ housing is built.  Labour will further reform compulsory purchase compensation rules so that landowners are awarded ‘fair’ compensation rather than prices based on the prospect of planning permission. This would mark a significant deviation from the current rules which are wholly based on market rates.

- The next generation of ‘new towns’: new communities with well-designed homes, green spaces, reliable transport links and bustling high streets. 

- More power for mayors: a package of devolution to mayors, with stronger powers over planning and control over housing investment. 

- Deliver the biggest increase in social and affordable housebuilding in a generation.

Hamptons View:  On the face of things, there isn’t much difference between the housebuilding and homeownership policy announced by the Labour Party so far compared to what we’ve seen pledged and, to some extent, delivered by the current Conservative government. Similar to the Conservatives, Labour has become increasingly vocal about reversing falling homeownership rates. The policy prescription sounds fairly familiar, too.  The Conservatives already have a mortgage guarantee scheme in place that was planned to run until the end of June 2025.  Both parties are planning to extend it indefinitely.  However, take-up of the scheme, which guarantees 95% of losses down to an 80% LTV, has been modest, with 42,000 mortgages underwritten so far due to the numbers being curtailed by the unaffordability of high LTV mortgages. Unless the terms of the scheme are changed, and/or interest rates fall, it's hard to see take-up rise significantly.

The idea of giving local first-time buyers ‘first refusal’ on new homes has been flirted with in the past, although never wholly implemented due to the risk to housebuilder viability.  Generally, it’s on the affordable housing side of things where local first-time buyers and renters tend to get priority, often with a ‘nominations period’ of between three and six months.

Labour increasingly views planning policy reform as a quick win to getting more homes built relatively quickly.  Housebuilders of all sizes have been vocal about the growing length of time it takes to get planning permission approved, as well as the cost and number of hoops they must jump through along the way.

While most will welcome a system simplification, local authority planning departments have seen some hefty real-term cuts to funding and are, as a result, still playing catchup with previous rounds of planning reform.  Less than half of councils have had an up-to-date plan since the inception of the National Planning Policy Framework, suggesting the impact of further changes to the system is unlikely to be felt quickly.

Planning Passports are perhaps one of the more radical policies set out by either party so far, which have the potential to reshape towns and cities quickly.  The extent to which it’s transformative will probably depend on how prescriptive the policy is and how streamlined the decision-making process is.  But it has echoes of the expansion of permitted development rights, which has given rise to the wave of office-to-resi conversions over the last decade.


Conservative Policy: The Conservative Party has not announced any plans to change the private school fee structure, which could, of course, change in the future.

Labour Policy: The Labour Party confirmed its plans to charge VAT on private school fees - currently, no charge exists. The added tax is expected to be introduced incrementally, rising over five years to the full 20% standard rate (not confirmed in the manifesto). This change, along with removing business rates relief for independent schools, is expected to generate £1.5 billion.

Our view: While this isn’t a housing policy as such, there has always been a close relationship between good state schools and the local housing market. If Labour were to win and introduce VAT on school fees, families who send their children to private schools would face a significant rise in their costs at a time when budgets are already under pressure.

Change in property values near state schools 

Ofsted Rating:





Average Price





2023 v 2022





2023 v 2008





Source: Ofsted, Land Registry & Hamptons

 While some will be able to adjust, others will likely move their children back into the state system.  Consequently, demand for homes near top-tier state schools will likely rise, while some smaller, lower-profile private schools may close.  Parents may move to smaller or more affordable homes or areas to help fund increased school fees.

Since the Labour leader announced this plan back in 2021, the market has been adjusting, and we’ve seen more competition for homes near ‘outstanding’ rated state schools.  Over a quarter (26%) of homes sharing a postcode sector with an outstanding school were sold after a bidding war so far this year (having received offers from three or more buyers).  In contrast, less than one in five (17%) homes near schools rated ‘inadequate’ were subject to the same levels of competition.

These homes close to top-rated state schools have also seen smaller price falls. In 2023, the average price of a home near an ‘outstanding’ secondary school sold for 1.5% less than the year prior, outperforming the rest of the market.  The same type of home near an ‘inadequate’ rated school sold on average for 5.5% less than in 2022.


Conservative Policy: Although it has yet to come into effect, the Conservative Party’s changes to the leasehold system have secured Royal Assent, meaning they can be enacted over the coming years (by the next government).

The changes are:

- A removal of marriage value, where homes with leases below 80 years usually face big increases in the cost of extending their lease.

- Changing the standard lease extension length to 990 years, up from the current 90 for flats and 50 for houses.  The changes also remove the two-year minimum ownership requirement before a lease extension or freehold buyout.

- Stopping new houses (not flats) being sold as leasehold (barring certain houses, such as those for retirement).

- Improve transparency of leasehold costs such as service charges and reduce the cost and ease of challenging these charges.

- No reform or cap on ground rents. However, it will become easier to buy the freehold and reduce the ground rent to zero.

In their manifesto, the Conservatives repeated their ambition to cap ground rents at £250 each year, reducing them to peppercorn over time and making it easier to take up Commonhold.  Commonhold is where owners are freeholders of their respective homes but own shared areas ‘in common’.

Labour Policy: The party intends to extend the current reform bill to encompass all the Law Commission’s proposals, the main one of which is to cap ground rents.  Their manifesto states an ambition to phase out leasehold, requiring all new flats to be sold as commonhold.  Their plan is to make commonhold the default tenure and facilitate the transfer to it.

Hamptons' view: While the Leasehold Reform Bill has been passed with Labour Party support, many details are still to be finalised.  These changes aim to increase transparency and reduce lease extension costs for the five million leaseholders in England, potentially making the process of buying and selling leasehold homes easier.  On average, it takes 32 days longer to exchange on a leasehold home than a freehold one. 

Service charges have also been facing increased scrutiny.  Our analysis revealed that the average service charge on a flat in England and Wales rose by a record 8.4% between Q1 2023 and Q1 2024, reaching an average of £2,247 a year.  The combination of high service charges and mortgage rates has deterred sales, leaving some leaseholders trapped.  While some of these costs will not disappear, greater transparency in managing costs and access to redress schemes should help. 

The removal of marriage value in lease extensions will significantly decrease the cost for those with short leases and large ground rents.  However, those with lower ground rents, such as the typical £10 per annum charged on ex-authority homes, may see the cost of a lease extension increase. 

Many freeholds are owned by large pension funds that rely on ground rents to provide a stable income.  Proposals to cap or abolish ground rents were met with strong opposition and were subsequently removed from the current bill.  It remains unclear how Labour plans to address the issue of large investments in freeholds without causing backlash or destabilisation in the pension sector. 

However, merely giving leaseholders the ability to buy their freehold and convert it into commonhold would not necessarily leave leaseholders better off than the existing share of freehold buyouts.



Conservative Policy: We are technically still in a ‘stamp duty holiday’ and the nil-rate band is set to return to the previous level of £125k in March 2025 from the current £250k.  The Conservatives have promised to permanently freeze the nil-rate band for first-time buyers which currently stands at £425k.

As part of their ‘Family Home Tax Guarantee’, Jeremy Hunt outlined a commitment not to increase the rate or level of stamp duty (SDLT).  However, it is unclear whether the nil-rate band for movers will fall back down to £125k or remain where it is today.

Labour Policy: Their manifesto set out plans to increase the stamp duty surcharge on overseas buyers by an additional 1%.  This is on top of domestic surcharges and would mean that foreign-based buyers would pay an extra 3% in stamp duty if they’re purchasing a main residence in the UK or an additional 6% on a second home.  The policy is expected to raise £40m, which will be used to fund new planning officers.  They have not announced any changes to mainstream stamp duty.

Hamptons' view: Stamp duty (SDLT) has long been a lever used by governments to win votes and boost the economy.  We saw SDLT cut post-Covid to stimulate the housing market, and we are technically still in a ‘stamp duty holiday’ today. 

The Conservatives have announced plans to freeze the threshold at which first-time buyers start paying SDLT at £425k which extends first-time buyers’ tax advantage over everyone else.  For many first-time buyers, saving up for a deposit is the biggest hurdle, but moving costs, such as stamp duty, add to this.  Given that 94% of first-time buyers purchased a home for less than £425k this year, the permanent cut is welcome news and will reduce the burden for most new homeowners.  That said, the affordability challenge to meet lender stress tests at high mortgage rates remains, and stamp duty will continue to be a bigger barrier in more expensive areas such as London where over a third of first-time buyers will still face a bill.    

So far, neither the Conservative nor Labour Party have announced plans to change rates for movers.  If the nil-rate band returns to the previous level of £125k from the current £250k, as currently planned from April 2025, the average SDLT bill for a mover on a £300,000 home would rise by £2,500.  This would make 89% of movers in England liable to pay a tax bill, double the share (44%) today. 

Stamp duty cuts tend to favour more affluent households, particularly those purchasing property in the South of England where prices are higher, which can be contentious.  This is similar to most tax cuts given that these households account for a disproportionate amount of the total tax take. 

There have been calls for the stamp duty nil-rate band to be increased annually in line with house price inflation.  While theoretically, this sounds sensible, in our view, this change would be too frequent and could cause distortions in the market with buyers delaying moves until the next indexation.  Given a house purchase or a house move can be a once in a generation event, buyers and sellers need clarity to enable longer-term planning.  In the long-term, stamp duty’s role as a stimulus, which can be turned on and off, hasn’t been particularly helpful to the market. 

Neither party have proposed a complete overhaul of the stamp duty system.  Labour, in particular, seems more focused on increasing transaction costs for international buyers. 

Labour’s plans to charge international buyers an additional 1% SDLT surcharge is fairly negligible.  However, cumulatively, international buyer tax rates have risen considerably over the last few years.  Given the relatively small numbers paying it, it’s unlikely to raise substantial sums, hurting middle- and lower-income households moving to the UK most.  Meanwhile, at the top end of the market, particularly in London where foreign-based buyers tend to be most active, it’s unlikely to act as a major deterrent.  Rather, these buyers are more sensitive to broader tax changes, such as how non-doms and company structures are treated.


Conservative Policy: As part of their “Family Home Tax Guarantee”, Jeremy Hunt outlined a commitment to freeze capital gains tax rates and maintain private residents’ relief so that people’s homes are protected from capital gains tax.  However, in a bid to boost homeownership, they are also offering landlords 100% relief on their capital gains tax liability if they sell their buy-to-let to a tenant in the next two years.

Labour Policy: There were rumours that Labour is set to increase Capital Gains Tax, but nothing was announced in their manifesto.

Hamptons' view: Capital gains tax (CGT) is due when a second home or investment property is sold at a profit.  Over the last few years, the Conservatives have slashed the annual CGT personal allowance from £12,300 to £3,000 this year, dragging more people into the CGT net.

However, in the last Spring Budget, the Government announced that it would reduce the higher rate of capital gains tax for landlords selling their properties from 28% to 24% in a bid to encourage more landlords to sell up.

But not all landlords will be better off.  When the personal allowance and rate cuts are taken together, it means that landlords declaring a gain below £68,000 will pay more tax.  Consequently, we have seen no signs that landlord sales have accelerated since then.  Any potential CGT hike by another government would likely weigh further on the number of homes being sold by landlords. 

The plan to offer landlords 100% capital gains tax relief if they sell their property to a sitting tenant is a nice gesture.  The change could save the average higher-rate taxpaying landlord who made a net gain of £89,000 over the typical period of ownership £20,640 in tax.

However, in reality, the take-up is likely to be low and doesn’t offer landlords whose tenants don’t want to buy their property an incentive to exit the market.  Investors will only be able to use the exemption if they sell their buy-to-let to a tenant who was renting that home before the day of the announcement (10 June 2024).

To further promote homeownership, capital gains tax relief could be offered to any landlord who sells to a first-time buyer (as defined for stamp duty relief purposes).  Our analysis shows that rising activity from first-time buyers over the last two years has meant that they purchased 47.7% of homes sold by investors this year, the joint highest share in over a decade.  Meanwhile, fewer rental homes are finding their way into the hands of other investors.



Conservative Policy: The Tories are likely to follow the plans set out in the Renters Reform Bill.  These include banning ‘no-fault’ evictions, abolishing fixed-term tenancies, making it easier to rent with pets, and creating a National Landlord Register and a Decent Homes Standard for private rented homes.

Labour Policy: Labour broadly supports the changes in the Renters Reform Bill but plans to extend the direction of travel.  Their manifesto outlines their intention to abolish Section 21 ‘no fault’ evictions immediately and give tenants the power to challenge unreasonable rent increases.  They have also suggested tighter landlord regulation, forcing landlords to investigate reported hazards within 14 days, and may pursue stricter energy performance requirements (scrapped by the Conservatives). 

The Labour Party has tried to distance itself from a recently commissioned report recommending that rent controls be pegged to the lower of local wage growth or increases in the consumer price index.  However, some MPs are sending mixed signals.  While the official Labour line remains that rent controls are not party policy, shadow chancellor Rachel Reeves recently said she could see a case for rent controls in local areas but did not favour a ‘blanket approach’. 

Hamptons' view: It’s the rental market that could undergo the biggest change with the arrival of a new government.  While a Labour government could come down harder on landlords than the Conservatives, they, too, have acknowledged the supply issue in the rental market and the important role private landlords play. There is a balancing act to be had, protecting the 5.2m tenant households across Great Britain while ensuring there are enough homes available for them to rent.

While some landlords are concerned, most have got their heads around the changes suggested in the Renters Reform Bill.  However, the possibility of further regulation by a Labour government could weigh on already low levels of investment in the sector and might mean more landlords leave the market.  Any form of rent control or stricter energy performance criteria, in particular, is likely to cause alarm.

From a tenant perspective, greater flexibility and stricter rules governing landlords should go down well.  However, more transparency within the system may backfire for some.  The removal of Section 21 could essentially create a public database of tenants who have been served with a Section 8 notice instead - mostly because they were in arrears or had committed anti-social behaviour.  Given that it’s likely to become more costly for landlords to evict problem tenants, landlords will increase their vetting process, which may make it difficult for some tenants to find a home.


Conservative Policy: Plans have already been passed to give councils the power to charge a 300% council tax premium on second homes from April 2025 and remove higher rate mortgage tax relief for holiday lets held in a personal name.

A consultation in April 2023 also proposed introducing a register of holiday and short-lets as well as requiring planning permission for an existing home to be used as a holiday let in certain areas.  However, legislation has yet to be introduced, so it will be down to a new government to enact this.

Labour Policy: There was no mention in the manifesto about changing the treatment of second homes or holiday lets.  However, back in 2022, Labour proposed introducing a licensing scheme for short-lets in England, similar to what already exists in Wales.  They may also tighten the definition of a holiday let in England to limit the number of second homeowners who are exempt from council tax, claiming holiday let business rates relief instead. 

Hamptons' view: Second homeowners are likely to find themselves in the crosshairs of a crackdown by both major political parties in a bid to put more homes in the hands of local people to live in.  However, the reality is that these changes are only likely to impact a small number of geographical areas.

Second home buyers have made up just 1.2% of all purchases in Great Britain so far this year, a record low.  However, these homes tend to be concentrated in a few areas.  Half of all second home purchases over the last decade were in just 13 local authorities.

While the policy proposals from Labour and the Conservatives aren’t miles apart, they are both likely to squeeze existing second home and holiday let owners and disincentivise new investment.  That said, there are potential pitfalls.  Often, holiday let homes, such as annexes and outbuildings, aren’t suitable for permanent occupation.  Furthermore, the introduction of a planning use class or licensing scheme could potentially add a premium to the value of existing holiday lets, pushing them further out of the reach of local first-time buyers.

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    I honestly cannot understand why we are even discussing what the Conservatives will do, 🤷‍♂️ They are on the precipice , and about to suffer an extinction 🦕 level event which will wipe them out for a generation. 🫣


    Deservedly so. I hope REFORM becomes the opposition party.


    That's the second best option, AL.

    It would be great if Reform actually take power on July 4th even if that means them entering into a coalition with the Conservatives.

    How many seats can they win from Labour? A YouGov poll showed that Reform was only taking 6% of votes from Labour. Reform needs to get its tax message across more widely so that the party appeals to Labour voters.

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    I think second best is all we can really hope for but even second best would be great

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    It would help, if the landlords are given incentives to sell to any first time buyers. Help to Buy to first time buyers should apply to buying property from landlords (at market rates), as well and not just the new builds from developers who sell at inflated prices.


    Any help to buy scheme that passes landlord owned property to tenants is almost certainly going to be ‘engineered by Gov’ to be a below market value deal in the tenants favour.

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    It doesn't matter how many houses each party say they are going to get built each year. Have they put any thought into who is actually, physically going to do the building? We simply don't have enough experienced tradespeople and there aren't enough apprenticeship places to train school leavers. There has been a lack of apprenticeships for well over 20 years. Last night one of my colleagues told me his 16 year old son has just left school and wants to be a carpenter. He's going to do a course at college for a year because he can't find an apprenticeship placement. If he still can't get a placement after the end of the first year he's going to have to try a different career. It's exactly the same scenario as my 37 year old son faced when he left school. He couldn't get an apprenticeship so did a one plumbing foundation course. Couldn't carry on to year two as he still couldn't get an apprenticeship. Then he did a carpentry foundation course but couldn't carry on to year two as he couldn't get an apprenticeship. He eventually got an apprenticeship as an Agricultural Engineer and learnt all sorts of useful things like welding. He quickly realised farmers don't pay much and he doesn't like cows. He's not a country boy at heart. Isn't it nuts that for well over 2 decades practical young people who want to be builders have had difficulties accessing necessary training?

    Instead of pie in the sky numbers politicians need to look at the reality of what can actually be done. Then look at how to make their fantasy numbers a reality. Just saying you want to build 1.5 million houses in the next Parliament doesn't make it happen. With more tradespeople retiring each year than apprentices entering the building industry there's a huge problem.

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    The ‘academic’ college based NVQ ( Not Very Qualified) type stuff now pumped out of various technical colleges is the problem. The old ‘true apprenticeship’ was a ‘timed served’ paid job led by a skilled tradesman. Both the tradesman and his/ her apprentice were hands on and both the work and the learning got the job done a full 5 days a week.

  • Jaeger  Von Toogood

    Vote reform uk 🇬🇧


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