Labour wins landslide election victory: the property industry reacts

The Labour party has won the General Election with over 411 seats declared so far - matching predictions by pollsters in recent weeks that the Conservative party's 14-year reign would come to an end.

Related topics:  Planning,  General Election 2024
Amy Loddington | Online Editor, Financial Reporter
5th July 2024
keir starmer
""Labour promised change. They must now deliver it.""
- Guy Gittins, Foxtons

Labour's manifesto promised to build 1.5 million homes during the next Parliament, as well as to update the National Policy Planning Framework and funding additional planning officers. Other policies affecting the property market included increasing the rate of stamp duty paid by non-UK residents, a 'brownfield first' approach designed to preserve greenbelt land, changes to compulsory purchase rules, and a permanent mortgage guarantee scheme for first-time buyers. It remains to be seen which policies will be enacted by Keir Starmer's government in the coming years - but here's the industry reaction...

Planning

Labour's promise to reform planning was one that industry experts were keen to see become a reality.

Claire Dutch, co-head of planning at law firm Ashurst, said that the planning system had long been 'blamed as one of the main causes of the housing crisis', with onging reforms by successive governments making the system complex and resource-heavy for local planning authorities. She added:

"If Labour are to achieve their target of 1.5million homes in 5 years, they need to get off the starting blocks quickly. They do not have time for a radical root and branch shake up of the system. 

There is a lot they can do under the current framework – relax green belt restrictive policy, introduce top down mandatory housing targets and properly resource the local authorities."

Nick Gray, Currie & Brown's  UK and Europe COO, agreed that time was of the essence, noting that the new government 'urgently' needed to reform the 'messy and complicated' system, while Turley chief executive Stephen Bell added:

“While the 1.5m housing target is clearly welcome, it’s critical we look at what has stopped us from building at these levels over the last decade and address those problems as a priority. A more positive and resourced planning system will be key to that."

Another area of concern for experts was how the new government would support growth under any reformed planning rules, with Iain McKenzie (CEO, The Guild of Property Professionals), noting that, while a welcome policy initiative: "Any planning reforms should ensure that communities are being supported by infrastructure rather than just housing estates."

Affordable housing

Propertymark CEO Nathan Emerson welcomed the news that the Labour government would focus on increasing affordable housing supply, noting that the 'chronic undersupply' had been an issue for many years. He added that they hoped to see 'long-term cross-party cooperation that delivers the right kind of homes in areas they are desperately needed'.

However, John Butler - former finance policy lead at the National Housing Federation and assistant manager at accountancy firm Buzzacott - warned:

"With a new Labour government, there is the risk that a renewed push on council housing could see funding for housing associations  fall. That would be a mistake given the vital contribution registered providers bring to the housing sector."

Phil Jenkins, CEO of corporate finance advisor Centrus, commented that more than just planning reform was needed to achieve Labour's goals: “It’s crucial now that Labour commit to their pledge to deliver the biggest increase in social and affordable house building in a generation. But this is unlikely to be delivered through planning changes alone, and will require a long-term rent settlement for capacity-constrained housing associations as well as additional public sector subsidy, which were notably absent from Labour’s initial specified spending pledges."

Green housing

Other experts noted that the Labour party find themselves at a significant juncture when it comes to the UK's net zero and sustainability goals. Gillian Charlesworth, CEO of the Building Research Establishment, said this was a 'major crossroads' with the international scientific community very clear about how much progress was required to meet 2030 targets.

She added: “With the built environment being the UK’s second largest source of carbon emissions, it is imperative the Government’s upcoming industrial strategy is delivered in close partnership with the sector to unlock and accelerate action towards the clean heat transition, improving existing housing stock and leading the way on building standards."

First-time buyers

While Labour's permanent mortgage guarantee scheme has largely been well-recieved, Rightmove's property expert Tim Bannister said there is 'an opportunity to go further in giving support to first-time buyers'. He said:

"Whilst a permanent mortgage guarantee scheme provides the certainty that this option will be available, from our research we can see that only a small number of first-time buyers are likely to benefit from it. Making the existing stamp duty thresholds permanent for first-time buyers would be a start, and then there is an opportunity to look at innovative solutions to help first-time buyers with both their deposit, and being able to borrow enough from a lender in the longer term."

Chris Gardner, CEO, Atelier, added: "The first-time buyer market is on life support. If we hope to keep it alive, the Labour party needs to deliver a new iteration of first-time buyer support. The withdrawal of the Help to Buy scheme in March 2023 has already had a significant impact on the uptake of new build developments, but we’re yet to see the full scale of the impact. The worst outcome we could see is an oversupply of new-build homes which developers are not able to sell to prospective buyers, that lay vacant."

Confidence and transparency is key

Almost all experts welcomed the stability of a government with a clear majority, suggesting it would bring confidence to the housing market. Richard Harrison, head of mortgages at Atom bank, said that the 'definitive result' was welcome after the uncertainty of the last few years which had taken its toll on borrowers, and said the size of Labour's majority should allow them to push on with their housing goals. However, he added:

"I’d like to see time given to whoever is appointed housing minister, given the way it has been a revolving door in recent years - the outgoing Lee Rowley was the 15th housing minister since 2010."

Propertymark's Nathan Emerson said that transparency and clear timelines were key to success - he added: "It is vital all manifesto promises are backed up with full transparency and a deliverable timeline on set ambitions over the coming weeks. All pledges must be implemented with fairness and workability to all involved and there must be full disclosure on how investment in housing will be encouraged and supported."

This cautious optimism was echoed by Foxton's Guy Gittins, who said: "Labour promised change. They must now deliver it."

 

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