What the Property Industry Expects from a Labour Government

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The property industry is preparing for significant shifts with a Labour government. Experts from various sectors have weighed in on what a new government could mean for housing, particularly with an ambitious agenda and potential policy changes.

Boosting Market Sentiment

Richard Donnell of Zoopla suggests that a decisive Labour victory could boost market sentiment, especially if it is accompanied by a base rate cut. Such a move would enhance market confidence and potentially uplift sales volumes by around 10% in 2024. However, the effectiveness of Labour’s policies will depend on their execution, particularly in delivering economic growth and wealth creation.

Addressing Housing Affordability

One of the critical challenges remains housing affordability, especially for first-time buyers (FTBs). Labour’s commitment to building more affordable homes is essential, but execution at both national and local levels is crucial. The existing First Time Buyer mortgage guarantee scheme only benefits a small percentage of FTBs, highlighting the need for broader measures to ease entry into the housing market, especially for first time buyers.

Planning and Development Reforms

Labour’s manifesto includes substantial changes to the planning process, such as building on low-quality greenbelt land and stopping rental bidding wars. Concrete policy details and government-backed initiatives will be vital for real progress.

Potential Economic and Tax Impacts

While a reduction in interest rates and a potential cut in Stamp Duty Land Tax for first-time buyers could boost the mid-market, additional taxes on second homes and changes to Capital Gains Tax could deter investors. Avoiding drastic measures that could inflate the rental market further will be important for the next government.

Long-Term Housing Commitments

Labour’s commitment to building 1.5 million new homes within five years and overhauling the planning system is a welcome initiative. These measures aim to fast-track residential development and provide much-needed housing supply. However, effective collaboration between national and local governments will be essential to achieve these ambitious targets.

Supporting the Rental Market

Improving standards in the private rental sector (PRS) requires incentives and grants that work with landlords rather than against them. Policies should focus on maintaining a balance that protects tenants while ensuring landlords remain engaged in providing quality rental housing.

Business Community Support

Business communities believe that increased revenues will be reinvested into the UK’s economy and infrastructure, promoting growth and making bigger cities more attractive for living, working, and investing.

Political Stability and Market Confidence

The prospect of a stable government with a strong majority could provide a rare period of political stability, potentially benefiting the property market.

A mix of opportunities and challenges with are anticipated, but it’s hard to argue that a lot of people wouldn’t be in favour of a shake-up of the property market. Key areas to watch include housing affordability, planning and development reforms, economic policies, and rental market regulations. 

The success of Labour’s ambitions housing agenda will depend on effective policy implementation and collaboration across all levels of government. With careful execution, these changes could lead to a more stable and prosperous property market, benefiting both homeowners and renters alike.

For advice and info about what this could mean for buying or selling your own property, get in touch with our team today at Home EA.

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