July 8th, 2024
Labour leader Sir Keir Starmer is poised to move into Number 10 after Labour’s resounding victory in last week’s General Election.
The first Budget and fiscal update from the new government may not be seen until at least September. This is when Labour is likely to unveil its major political announcements.
Regardless, Labour’s election manifesto provides some insight into their plans for the housing market.
Home Building:
One of the headline goals in Labour’s manifesto was of course to build 1.5 million homes over the next five years, with an added emphasis on building housing along the “grey belt”. This initiative aims to alleviate the housing shortage and make homeownership more accessible to first-time buyers and lower-income families.
Labour’s ambitious housebuilding targets could significantly increase the housing supply, potentially stabilising or even reducing house prices in the long term.
For prospective buyers, especially first-time buyers, this could mean more opportunities to enter the housing market.
However, it’s crucial to consider the time frame for these developments; the effects may not be immediate but will unfold over several years.
Stamp Duty:
On the topic of first-time buyers, a Labour government my mean changes to the current house price at which stamp duty is issued.
Back in 2022, Rishi Sunak raised the threshold for stamp duty up to £425,000, with the promise of making this permanent if he won the election. However, Labour will likely allow the threshold to drop back to £300,000 after its expiry date in April 2025.
Although, this is countered by the party’s ‘Freedom to Buy’ scheme, which looks to help get 80,000 young people onto the housing ladder over the next half-decade while keeping mortgage rates as low as possible.
Rental Market:
Another headline manifesto of Labour’s was to immediately abolish Section 21 ‘no fault’ evictions.
Briefly summarised, a Section 21 eviction is when a landlord provides a tenant with two months’ notice, without having to provide a reason for doing so.
This should provide renters with further peace of mind, as they won’t be affected by exploitation. This could also encourage more long-term renting, altering the dynamics between renting and homeownership.
Landlords however may face new compliance challenges, and so we could see a surge in the number of landlords issuing Section 21 notices before the ban is likely put into place.
A Labour victory in the 2024 general election could bring significant changes to the UK housing market.
Increased housebuilding would address one of the sector’s most pressing issues, however the struggle first-time buyers face may require more attention. Despite this, a possible base rate reduction in the coming months could also provide relief, both for prospective and current homeowners.
At CMME, we stay vigilant, regardless of the current landscape, in the effort to get our clients the best possible mortgage deal. For personalised advice as you take your next step on the property ladder, click here to book in with one of our team.