What will a Labour win bring to the property market?
What will a Labour win bring to the property market?
The Labour Party has just claimed a landslide victory after winning a majority of 411 seats (over 121 for the Conservatives) in the general election.
Naturally our sales and lettings teams in Westminster, London Bridge and Kennington have been keen to explore what a change of government could mean for London’s property market. This update is based on the latest expert opinion, revealing what we know – and didn’t know – about Labour’s plans.
What can we expect for the property market?
The key themes that have emerged so far are house building, lettings reform, energy efficiency and leasehold reforms. We can expect to hear a lot more about ‘rebuilding Britain’. This reflects Labour’s pre-election promise to build more homes, together with the infrastructure needed to support those homes.
For the rental housing market the emphasis is on reform, with many initiatives borrowed from the last government’s (now defunct) Renters’ Reform Bill. Leasehold reform is also high on the government’s to-do list.
Prospects for home movers and investors
The government aims to build 1.5m more homes. Planning restrictions will be overhauled to speed up the process of building houses and new towns will be created. Local people will have first dibs when property developments go on sale, so they can benefit from more affordable new house prices.
The government is about to announce a National Planning Policy Framework (NPPF) which will provide more detail on changes to the planning system. We already know that in London, so called ‘grey belt areas’ (places within the capital’s green belt that are deemed poor quality or ugly) will be utilised for home building.
How will home buyers benefit?
Labour has said that it wants to be known as the party of home ownership and promises “tough spending rules” to keep mortgage rates low. It has also pledged to retain and expand the Conservatives’ mortgage guarantee scheme for young people and first time buyers.
The original scheme – which helps people with low deposits get on the housing ladder – was due to expire in June 2025, but it will now continue under the name ‘Freedom to Buy’. Housing Minister Matthew Pennycook claims the scheme will help 80.000 young people achieve their home owning ambitions over the next five years.
There is, however, slightly less positive news when it comes to Stamp Duty. In 2022 the last government temporarily cut the rate of Stamp Duty (a tax payable when you purchase a property) and this term is due to end in April 2025.
That means from April 2025 it will cost more to buy a property costing over £125,000. If you are planning to buy a property in London, you would be well advised to do so before that date.
How will renters and landlords benefit?
The government is keen to abolish Section 21, which allows a landlord to evict a tenant without an explanation. Under the ban, notice to quit can only be given under a set of specific reasons, which will be enshrined in law. Landlords will, however, benefit from new, expanded grounds for possession to help them reclaim their properties.
Before the election Labour’s Angela Rayner promised that legislation to abolish Section 21 would be passed on the first day of the new parliament sitting, but this has not happened. Progress could now be delayed until the court system is considered capable of dealing with the expected rise in cases.
The new government will also legislate to improve standards within the private rented sector. This includes issuing new landlord health and safety guidelines for dealing with damp and mould and strengthening tenants’ rights around pet ownership. They will also take steps to outlaw bidding wars between tenants.
Is there any news for homeowners?
The Law Commission has recommended reforms to leaseholders’ rights: lowering the costs of enfranchisement and introducing a simpler, cheaper approach to the right to manage. These reforms will be passed into law under a new Leasehold and Commonhold Reform Bill.
The government will also take action to regulate unaffordable ground rents and provide new protections for freeholders who pay towards estate costs. Commonhold tenures will be reshaped to meet modern requirements, with restrictions on new leasehold sales. Residential leaseholders who have low-level unpaid debts will get protection to prevent them from forfeiting their homes and savings.
When will we know more?
Our agents make it their mission to stay up to date with the latest legislation affecting property sales and lettings and we’ll let you know as soon as we have more information.
Meanwhile, if you are looking for a home or property investment in a sought-after central London location, why not share your plans with us? We have been successfully helping buyers, sellers, investors, landlords and renters for thirty years, offering a truly personal service to all our clients.
