How Does a Labour Government Impact the Residential Property Market?
Following an extremely dramatic General Election, Labour’s Sir Keir Starmer is now in power as the UK’s new Prime Minister. This came after a drastic fall for the Conservative Party, led by Rishi Sunak, who secured just 121 seats in the House of Commons.
Starmer has already set out a number of issues he plans to tackle in his first month as Prime Minister, such as immigration, NHS strikes and EU elections. However, this begs the question, how does a Labour Government impact the Residential Property market?
The Future Landscape of Property
Recent political changes have left many homeowners and investors wondering about potential impacts on their assets. Interestingly, a recent national poll suggests a significant portion of those concerned with housing issues decided to vote Labour in the election. This trend indicates a strong public desire for fresh approaches to tackle ongoing challenges in the UK's property sector.
Anticipated Revisions to Planning Policies
The newly elected government has pledged to revisit and modify the National Planning Policy Framework. This commitment signals a potential shift away from some of the policies implemented by the previous administration. Property buyers will be keenly awaiting details on which elements of the existing framework will be retained and which will undergo revision. These changes could have significant implications for property development, zoning, and land use regulations.
How Are First-Time Buyers Affected?
One of Labour’s main and most exciting objectives is to support first-time buyers. They will be introducing a Freedom to Buy Scheme to ensure over 80,000 young people have a more accessible route into the property market. In addition to this, the current mortgage guarantee scheme will become permanent, which has been well-received by those looking to buy a house in the next few years.
The Development of New Houses
Labour has unveiled plans for a substantial boost to the UK's housing stock. Their proposed strategy aims to introduce 1.5 million new residential units to the market. This ambitious project is designed to tackle two pressing issues in the current property landscape:
- Addressing the shortage of available housing
- Stabilising property prices, which have been driven up by the imbalance between high demand and limited supply
In order to succeed with the plan, Labour is looking to fast-track construction on urban brownfield areas, expand development opportunities by releasing additional 'grey belt' territories, allocate resources for urban growth and revitalisation initiatives, and enhance developer responsibilities within the Affordable Homes Programme.
Changes for Landlords
Landlords should brace for potential changes affecting eviction procedures, rent increase regulations, tenant bidding practices, and upfront payment limits. New standards for property maintenance and safety may also emerge. Additionally, possible adjustments to capital gains tax rates could impact investment returns.
Landlords should be carefully monitoring these developments.
What Will Happen to House Prices?
The future of house prices remains somewhat uncertain. Broader economic factors, particularly interest rate trends and overall national economic performance, are expected to be more influential in determining housing market values than policy changes alone.
How We Can Help
Sir Keir Starmer promised a lot in the Labour manifesto and campaigns, and the country seems to be hopeful that the residential property market will see improvement with a new government in power. We are eagerly awaiting to see what changes will happen immediately, however, the implementation of new legislative measures can involve a lengthy journey from initial proposal to final execution.
Here at Bell Lamb and Joynson, we are able to assist you with a wide range of residential property matters. Following the 2024 elections, you may have questions, or you may be looking to buy or sell your house. Whatever your queries are, we are here to help.
Call us today on 03444124348 or email contact@bljsolicitors.co.uk for a chat with one of our experts.