Conservatives vs. Labour: Housing plans and proposals
From rent controls to boosting housing supply, here's how Conservative and Labour plans for the housing sector compare.
Updated: 25 July 2023
Housing is always a key policy for any political party, as it’s a topic that affects everyone. The Conservative party has put all its eggs in the Renter (Reform) Bill basket, with an array of changes to come. Not to be outdone, the Labour party has released a steady flow of stories around its draft manifesto with plans for the housing and rental sector, including rent controls and more.
So, where does each party stand according to these recent statements? Read on for a brief overview of their proposals around these key points:
- Reforming private renting
- Introducing rent controls
- Boosting housing supply
- Helping first-time buyers
- Providing social and affordable housing
- Regulating holiday homes and short-term lets
- Abolishing the leasehold system
- Upgrading the energy efficiency of homes
- Tax on residential properties
1. Reforming private renting
The Conservative government's direction for the private rented sector is no secret. The Renters' Reform Bill, first revealed in 2019, has now been introduced to Parliament.
The associated white paper, published in June 2022, outlines proposals to abolish section 21, to shift all tenancies to periodic, and to introduce new standards to the rental sector. You can find a more comprehensive guide on these changes on Newsagent.
Labour has shared that there are “significant doubts” around the version of the Renters (Reform) Bill as introduced, due to the Conservatives arguing over its details.
Shadow Housing Secretary Lisa Nandy said in September 2022 that a Labour government would "tilt the balance of power towards tenants with new rights and protections for renters.”
The party promised a Renters’ Charter, offering an end to no-fault evictions, the right for renters to have pets, to make reasonable alterations to a property, introduce a four-month notice period for landlords - and bring in an end to automatic evictions for rent arrears.
2. Introducing rent controls
Although some corners of the Conservative party are in favour of a rent freeze, the current government has rebuffed calls for a freeze coming from, among others, the Labour party Mayor of London, Sadiq Khan.
The Renters' Reform Bill white paper shared that "this government does not support the introduction of rent controls to set the level of rent at the outset of a tenancy".
There are plenty of vocal proponents of rent controls in the Labour party, including Sadiq Khan and Manchester Mayor Andy Burnham. However, the party also includes some detractors, such as Shabana Mahmood, a senior MP and Labour’s Campaigns Manager.
Lisa Nandy also previously showed support for the idea of local councils having the ability to introduce a rent freeze, yet has since backtracked. She says: "rent controls that cut rents for some will almost certainly leave others homeless."
The calls for rent freezes tend to crop up in cities, such as London, Liverpool, and Manchester, suggesting that a nationwide freeze or cap would be unlikely, even under a Labour government.
3. Boosting housing supply
The Conservatives set in 2021 an ambitious target of 300,000 houses to build by the mid 2020s. However, in December 2022, Michael Gove backtracked, and updated these targets as "advisory", but since then, Gove said that the government would aim to meet this target "as soon as we possibly can."
The government has now published its long-term plan for housing, with proposals to ease planning rules in cities to allow the conversion of empty retail premises in homes, as well as relaxing the rules around barn, warehouse and agricultural building conversions.
Homeowners will see more lenient restrictions for extending homes, converting lofts, and renovating new buildings too. This is all intended to help the government build 1 million new homes this parliamentary session.
Labour party leader Keir Starmer has said that he would reinstate the target to build 300,000 homes under a Labour government - as well as updating planning laws to help local authorities have more say in what's built where.
Labour has also shared that scrapping the house building targets could cost tenants up to £200 per year by 2030. However, no specifics have been released around how this increased target would be made possible.
In response to the Conservative's new long-term plan, shadow levelling up secretary Lisa Nandy has said: "The government has never met its target to build 300,000 homes a year and today’s announcement doesn’t come close to matching the scale of ambition needed to fix the housing crisis."
4. Helping first-time buyers
Prime Minister Rishi Sunak has said that he's considering reinstating the Help to Buy scheme, to help first-time buyers get on the property ladder. However, some say that this will simply inflate property prices more, negating the effect of the subsidy.
In 2022, then-Prime Minister Boris Johnson also committed to extending the Right to Buy scheme to housing association tenants. However, this change has yet to come into effect.
Back in September 2022, Keir Starmer announced plans to shake things up, with "no more buy-to-let landlords or second homeowners getting in first."
The Labour party has released data showing that two thirds of children born in 2023 won't own a home before their fifties - and has said that it's aiming for 70% home ownership.
To reach this target, it proposes introducing a mortgage guarantee scheme and increasing the stamp duty surcharge for foreign investors.
Keir Starmer has also said that the party plans to give first-time buyers "first dibs" on new-build homes, over existing homeowners - although questions have been raised on how this would work in reality.
5. Providing social and affordable housing
A poll recently found that three quarters of Conservative voters want more social housing built in the UK. The Department of Levelling Up, Housing and Communities has shared that it has invested £11.5bn in its Affordable Homes Programme to "deliver tens of thousands of homes for rent and sale right across the country."
However, its targets - now deemed "advisory" - only allocated 33,550 homes for social rent. That figure is at odds with the social housing waitlist of more than 1 million households.
Nandy has shared that Labour would "restore social housing to the second largest form of tenure." Currently, social housing sits behind private rented properties, at only 17% of households.
For example, the party will aim to reduce the number of social homes being sold through right to buy - while making sure that new social housing is built in their place.
However, Labour have yet to release concrete plans around how they aim to achieve this target.
6. Regulating holiday homes and short-term lets
The current government has started to take steps in recent months to crack down on short-term and holiday lets, particularly in tourist hotspots.
The rules around accessing business rates for short-term rentals have already tightened, and two new consultations have recently been published. These will assess planning permissions and a short-term let register in England.
Wales and Scotland have already implemented their own licensing schemes through their devolved governments.
Back in July 2022, the Labour party surfaced a concept similar to the licensing scheme in Wales for short-term lets in England.
This has the same aim as the measures that the Conservative government is suggesting - to help support tourist areas hard hit by the influx of holiday homes. You can read more about the Welsh system in our blog.
The party is also reportedly considering raising the 3% surcharge for second homes, and raising the council tax premiums to max. 300% if it comes to power.
7. Abolishing the leasehold system
In January 2023, Michael Gove pledged to end the leasehold system, and convert it to a commonhold system - but the Guardian now reports that he's backtracked on this pledge.
Now, measures expected to come into play are a cap on ground rents, more powers for tenants to choose their own property management companies, and a ban on the building owners forcing leaseholders to pay legal costs arising from disputes.
Nandy previously has supported abolishing UK leasehold laws, dubbing them “feudal” and “archaic”.
She approves the introduction of a "commonhold" system instead - something floated back in 2019 in Labour's report, "Ending the Scandal – Labour’s New Deal for Leaseholders."
8. Upgrading the energy efficiency of homes
The conservatives are on the brink of announcing a delay to the new rules around upgrading all rental properties to an EPC band C. The current deadline is April 2025 for all new tenancies.
This is in recognition of the current pressures on landlords and therefore housing supply. You can read more about the proposals to increase Minimum Energy Efficiency Standards in our guide.
The Labour party's draft manifesto has outlined that it plans to deliver a "National Warm Homes Plan". Within that, it plans to make sure that every home meets an EPC C standard within a decade.
It also plans to give local authorities and devolved governments more resources to help with those upgrades - but it shares no details around what those resources may entail.
9. Capital gains tax on residential properties
Under the conservatives, the capital gains tax allowance (CGT) was reduced from £12,300 to £6,000 from April 2023.
It will decrease further to £3,000 from April 2024.
The Labour party has ruled out increasing CGT , with Shadow Chancellor Rachel Reeves saying that it has "no plans for a wealth tax".
Reeves said in 2021 that "t would be best to tax "“people who get their incomes through stocks and shares and buy-to-let properties”.
However, Reeves now shares that Labour would instead focus on not overspending public money rather than taxing the wealthy.