Rightmove’s pre-election report: proposed priorities for next government

Accelerating house-building, first-time buyer support, stamp duty reform & greater green incentives

• Ahead of July’s general election, Rightmove suggests four areas of the housing market that need to be addressed to help people move home:
  • Accelerating house-building for sale and to rent, along with longer term solutions to help more people to afford to buy their first home
  • Stamp duty reform to help mobility in the market, which is the most requested change from home-owners from a new Rightmove study of over 14,000 people
  • Incentives to help both home-owners and landlords make their properties greener – with much more clarity for landlords on any green legislation that could come in
  • Working with industry to create new ways to help simplify and speed up the home-buying process
• Rightmove’s pre-election report is based on home-owner and renter insights, along with views from agents and Rightmove’s housing and mortgage market experts

The UK’s biggest property website Rightmove today proposes some of the key priorities that the next government should tackle, based on views from Rightmove experts and agents, and research among over 14,000 home-owners and renters.

A key ask of the next government is that they prioritise long-term solutions over short-term policies that only help certain people, or certain areas of the UK, at set moments in time.

Rightmove’s CEO Johan Svanstrom says: “Being the UK’s largest home listing and search platform, it’s clear to us from our large data sets, consumer surveys and talking to our agent partners that there are definite opportunities to improve fundamental aspects of the housing market. They include helping first-time buyers, building more homes and driving higher digitisation of processes. There’s also an increasingly critical need to support builders and people to make their homes greener. We’re keen to continue to help the industry and government with insights from the millions of people who use Rightmove.”

Accelerating house-building and long-term solutions to help affordability

The undersupply of housing in the UK has contributed to ever-increasing house prices and rents, with national average asking prices of homes now 22% higher than five years ago, at £375,131, and national advertised rents up by 40%, at £1,479 per calendar month.

Over the past five years the gap between supply and demand has widened. Demand is measured by looking at the number of people sending enquiries about homes for sale or to rent on Rightmove. Since April 2019, buyer demand has risen by 15%, while supply has decreased by 6%. In the rental market, demand has increased by 32%, with supply reducing by 38%.

If the delivery of new homes can be accelerated, whilst still maintaining quality levels, it could help more people wanting to move to their next home or to get on to the property ladder.

Rightmove’s property expert Tim Bannister says: “One way that could help to accelerate house-building is to streamline the planning process, which is highly complex and challenging. If the government can create smoother processes, working closely with all key stakeholders, it could transform the delivery of new homes and produce more affordable housing. Not only could this help first-time buyers, it could also open up a big opportunity to help downsizers move to greener homes with lower running costs.”

In the rental market, the fast-growing Build-to-Rent sector has helped to bring in a proportion of new developments, however there is still nowhere near enough stock to meet demand. Building more homes is the fourth highest priority among renters when asked what they want to see from the next government.

Hannah Marsh, co-founder of residential reviews platform HomeViews, now part of Rightmove, says: “There’s a wide-ranging group of people who live in, or who want to live in, Build-to-Rent homes – from young professionals to families. With a chronic shortage of rental stock in the UK, policy reform is needed to enable developments to be built more quickly.”

More support for first-time buyers was the most requested change among renters from the next government in Rightmove’s study.

Stretched affordability, especially with elevated mortgage rates in recent years, has made it challenging for people trying to juggle paying rent, saving for a deposit, and earning enough to pass affordability tests. This is especially true for people trying to buy on their own.

Rightmove’s mortgages expert Matt Smith suggests a review of mortgage affordability criteria could help: “There’s an opportunity to unlock greater affordability in a responsible way, which could help more first-time buyers get on the ladder. First-time buyers are already taking out longer mortgage terms and lender innovation has included the introduction of longer-term fixed rates that are likely to be part of the solution as they help by ensuring certainty of payments.

“Various mortgage schemes have played their part and supported a number of people, and we know from our study that people would like to see new schemes introduced, but we think longer-term solutions would be more effective than short-term schemes. Either way, it’s most likely that regulatory change is needed, so it’s critical that the government works with regulators and lenders from day one on any mortgage solutions, to ensure buy-in and take up, which will in turn create more options for first-time buyers.”

Stamp duty reform

The biggest change that home-owners and agents would like the government to introduce is a reform of the stamp duty system.

The barrier that stamp duty presents, especially in higher priced areas, could be preventing thousands of people from moving. If a new stamp duty system took into account regional property prices, or helped encourage more people to downsize, it could help movement in the market.

Data from Rightmove shows that in London, only 4% of homes for sale are exempt from the current stamp duty charges for all buyers, compared to 71% in the North East.

Rightmove’s property expert Tim Bannister says: “At the very least, the next government should make the current changes to first-time buyer stamp duty charges in England permanent, as the higher thresholds introduced in 2022 are due to expire next year. But there’s also a bigger opportunity to reform stamp duty to encourage more movement up and down the property ladder. With such regional variations in property prices, increasing stamp duty thresholds in line with these regional variations would seem a logical first step for stamp duty reform.”

Incentives to help people go greener

Green incentives are the third most requested change of the next government from home-owners. For renters, the desire for legislation to come in for landlords to upgrade homes came in their top five.

The focus on helping people make their homes greener has fallen off the government’s agenda in recent years. A proposed deadline for landlords to improve homes up to an EPC rating of C was scrapped, and it’s clear that there is a lack of awareness among home-owners about what changes they should make and why.

Rightmove insight shows a decline in the number of landlords planning to make energy-efficiency upgrades to properties with lower EPC ratings. In 2022, over a third (36%) of landlords said they planned to make improvements to properties rated below a C. In late 2023, after the government had announced they were scrapping targets, this dropped to 26%.

Rightmove’s lettings expert Christian Balshen, says: “Landlords need clarity around any legislation that may come in, but also need help with incentives such as bigger, more widely accessible grants or tax savings, as these in turn will help tenants.”

Home-owners also need better and easier access to schemes that enable them to make green improvements, with the recognition that each home requires different improvements, and that currently the upfront costs are a big barrier to change.

Simplifying and speeding up the home-buying process

Ways to simplify the home-buying process are the second most requested change from Rightmove’s study among home-owners.

It is currently taking over seven months from when someone puts their home up for sale until they move. This painfully long timeframe, with no recent improvement, means home-movers have to navigate a complex and frustrating process.

Rightmove’s legal expert David Cox says: “It’s vital that the next government works closely with the property industry to come up with standardised solutions to help speed up the home-moving process, to benefit both home-movers and agents. Digitisation is key, and there has been innovation in this space, but it also needs a solid focus from the next government. A well-developed and adopted solution has the potential to not only accelerate the home-buying process, but also encourages a less stressful, better understood and more seamless transaction for home-movers.”

Home-owners: top five priorities for the next government

1.      Reforming the stamp duty system

2.      Simplifying the home-buying process

3.      Incentives to help home-owners make green improvements

4.      More mortgage schemes to help people afford to move

5.      Incentives for downsizing

 

Renters: top five priorities for the next government

1.      More support for first-time buyers

2.      More mortgage schemes to help people afford to move

3.      Simplifying the home-buying process

4.      Building more homes

5.      Legislation to improve the energy efficiency of rental homes