What Does The Property Industry Expect From A Labour Government?

Sir Keir Starmer

Labour are on course for a landslide victory in today’s general election with a majority of 212 seats, according to the final YouGov poll projection of the campaign.

This will give Sir Keir Starmer the biggest majority for any single party since 1832 in a vote which YouGov’s last MRP suggests will break a series of electoral records.

YouGov’s central projections are vote shares of 22% for the Conservatives, 39% for Labour, 15% for Reform UK, 12% for the Liberal Democrats and 7% for the Greens.

These would result in 431 seats for Labour, 102 for the Conservatives, 72 for the Liberal Democrats, 2 for the Greens and 3 for Reform UK. The SNP have 18 seats in Scotland, and Plaid Cymru 3 in Wales.

So what will the new Labour government mean for the housing industry?

Zoopla’s Richard Donnell commented: “If Labour win a big majority, as looks likely, it may well give a boost to the overall market sentiment as the two main parties aren’t miles apart in many areas.

“There will be a base rate cut at some point which will do more for market confidence than the election itself, and if this came in quick succession it could support sentiment and sales volumes which are on track for a 10% uplift in 2024.

“In terms of housing policies, the growth agenda is positive but it actually needs delivering. The housing market is an extension of the economy so a growing economy and wealth creation is ultimately good for homeowners.

“With regard to home ownership, affordability remains a big challenge especially in the south of England. The First Time Buyer mortgage guarantee scheme may help 5% of FTBs a year, so the pressure is still on FTBs to enter the market with chunky deposits unless an incoming government is really able to boost the supply of more affordable homes, both to buy and to rent.

“The agenda to build more homes is right but it needs a national government to set the big picture and invest and then empower local government to deliver what is needed on the ground – there is no one size fits all solution to this.”

Dan Channer, group MD at Haslams, said: “Will a Labour Government change the housing market? The Labour Manifesto is full of policies which appear to make sense – wholesale changes to the planning process; building on low-quality greenbelt; stopping rental bidding wars – but few people believe that 300,000 new houses a year will be built.

“Rumours abound of the government building homes with its own balance sheet and we look forward to concrete policy replacing gossip. George Osborne stole a march on Labour with the banning of Section 24 mortgage relief and it led to the post-Covid rent increases which have, ironically, disenfranchises younger voters. We hope that policy makers see that improving standards in the PRS requires incentives and grants which work with landlords, not against them.”

Mark Pollack, co-founding director of Aston Chase, commented: “In the absence of any additional unforeseen hefty Corbynite/draconian ‘new’ taxes I could actually see a boost to the core and mid markets if interest rates come down and Stamp Duty Land Tax for first time buyers is reduced or abolished this alongside a rare period of political stability should Labour win with a large majority.

“Conversely, if a Labour government were to attempt to introduce capital gains tax on principle residences this would have disastrous consequences and serve only to further inflate the existing rental market so hopefully this isn’t a likely outcome albeit additional taxation on second homes seems an inevitability which will further reduce the number of private Landlords as this so called form of ‘investment’ has become an increasingly unattractive proposition for most Landlords due to the withdrawal of tax relief, increased interest rates, exponential increase in services charges and the costs associated with renting not to mention the disproportionate protection afforded to Tenants.

Jeremy Gee, managing director of Beauchamp Estates, remarked: “Despite the general election announcement we did not lose any of our agreed transactions. Unlike most previous elections, the likely outcome of this one, a Labour Government, is already known, so this slowdown will just be a brief pause, and we expect a busy Summer ahead.”

Gee added: “Under the new Labour government we may expect to see some changes to Capital Gains Tax and Inheritance Tax and we already know that Labour will push ahead with the proposed reforms to Non-Dom status, and will also increase the Stamp Duty Land Tax surcharge for overseas buyers by an additional 1%.

“However, it is important to note that leaders from Britain’s business community, figures such as Sir Jim Ratcliffe and John Caudwell – a major investor in Mayfair real estate – are supportive of the new Labour Government because they highlight that the raised revenues will be invested in the UK’s economy and infrastructure, which should help the economy to grow, making London a desirable place to live, work and invest.

“The Labour government is committed to building 1.5 million new homes during the first five years of a Labour administration, overhauling the planning system so that new residential development can be fast-tracked and restarting new housing targets for the various local authorities. All of this should be welcomed. It should be noted that the London property market historically has done well under Labour governments, and there is no reason why this should not continue under Sir Kier Starmer.”

Peter Wetherell, founder and executive chairman of Wetherell, said: “This is my 11th General Election, and I have never seen one quite like this where the result has for a long time been seen as a forgone conclusion. Because of this mindset we have seen that buyers in London’s best addresses, and our clients in Mayfair in particular, are treating it absolutely as business as usual. There have never been so many properties under offer at a comparable time. It is almost as if a General Election wasn’t happening, for example we put a Mayfair townhouse on the market just a few days ago and it is already under offer and we have just finalised another deal for an apartment in Grosvenor Square.”

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