Jeremy Corbyn’s recent election as leader of the Labour Party has caused more than a few eyebrows to rise amongst commentators and investors alike over the last couple of days. The left-wing MP for Islington North has seemingly caught everyone off-guard with his unexpected win, but what does it actually mean for the UK property market?
Well, firstly, it is important to remember that the leader of the opposition doesn’t hold any direct power over the policies implemented by the government. While debate may shift further to the left than we have been used to in recent years because of Mr Corbyn’s election, actual policy change is unlikely.
However, the change in focus will undoubtedly lead the other major parties to adopt a more socially conscious outlook, and affordable housing is certain to be high on the agenda.
Generation Rent are becoming increasingly fed up
It is believed that a large proportion of votes went to Corbyn because of his stance on housing, and the growing discontent among those unable to get a foot on the property ladder is likely to fuel the new leaders desire to make a difference in this area.
Corbyn recently stated that he would like to see the Right To Buy Scheme extended to private tenants as well as those currently living in council accommodation. The Labour leader believes that the discounts enjoyed by council tenants who wish to purchase their rented properties should also be given to those who rent from private landlords.
The conservatives have already committed themselves to extending the Right To Buy to those living in housing association properties, as they are considered not-for-profit landlords. However, Corbyn would like to take things further still. Under his control, for-profit private landlords, too, would have to sell their properties to longstanding tenants at a discounted rate.
Buy-to-let tax relief
Another area of concern, and probably a more viable one, is the upcoming changes to the tax relief available on buy-to-let mortgages. New rules have angered many landlords, with the limit on tax relief restricted to 20 per cent from 2017, but Corbyn’s election could play into the hands of the government and strengthen their position.
Petitions have been made to scrap the move in order to have the tax relief on buy-to-let mortgages reinstated. However, with Mr Corbyn sitting on the other side of the despatch box, it is highly unlikely that the new rules will receive any challenge whatsoever. Some commentators are even going as far as to say that the election of Jeremy Corbyn could give the chancellor, George Osborne, the opportunity to cut the tax relief even further.
Politics and property have clashed before
The fact of the matter is, however, that turbulent events have hit the property market in the past and have had little to no effect on the stability of the UK housing sector. Talk of property in the UK is almost as ubiquitous as that of the weather and – with so many of us invested in it – it is unlikely that someone who wishes to rock the boat too much will get anywhere near having the power to influence any actual decision making.
Feature image credit: The Weekly Bull via Flickr
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