Labour's Landslide Victory, what does it mean to the Property Market?

Regardless of what your political persuasion is, there is no denying that Labour has secured a significant victory in the recent general election, claiming over 400 seats. New Prime Minister, Keir Starmer, declared that the UK is waking up to "the sunlight of hope," signalling a new chapter after 14 years. With Labour's ambitious housing policies at the forefront, the property market is poised for significant changes.

Labour's Housing Agenda

Labour's manifesto focusses on addressing the housing crisis through several key initiatives:

Building 1.5 million homes
Reforming planning rules
Prioritising development on brownfield and "grey belt" land
Extending mortgage schemes for smaller deposits
Enhancing renters' rights

These policies aim to tackle the chronic undersupply of affordable housing and create a more stable property market.

Industry Reactions

Nathan Emerson, CEO of Propertymark, welcomes the new government's engagement, emphasising the need for sustainable housing. "Sustainable housing is the foundation for any strong economy," Emerson stated. "We want to see long-term cross-party cooperation that delivers the right kind of homes in areas they are desperately needed."

Dominic Agace, CEO of Winkworth, highlighted the potential for increased stability. "With political certainty, we can put the instability of the past ten years behind us," Agace commented. "Interest rate cuts pending should encourage a new upbeat mood in the property market."

However, Agace also urged caution in implementing new policies, particularly regarding the private rental market. "Banning Section 21 without adequate resources in the court system to allow landlords to exit antisocial tenants will lead to a sell-off," he warned. "Mechanisms need to be well thought through to avoid unintended consequences."

Impact on the Property Market

The election result is expected to bring a wave of changes that will affect various sectors of the property market:

Increased Housing Supply: Labour's pledge to build 1.5 million homes is a bold step towards addressing the housing shortage. By focusing on brownfield and "grey belt" land, the government aims to balance development with environmental concerns.
First-Time Buyers: The extension of mortgage schemes and the proposed reduction in the stamp duty threshold for first-time buyers from £425,000 to £300,000 will make home-ownership more accessible. Matt Thompson, head of sales at Chestertons, noted, "Buyers will be looking for Labour to fulfil its pledge to introduce the Freedom to Buy scheme."
Rental Market: The proposed abolition of Section 21 "no fault" evictions and the introduction of rent controls are expected to reshape the rental market. Adam Jennings, head of lettings at Chestertons, pointed out that these changes could provide greater security for tenants but may also lead to a reduction in rental property supply.
Investment and Planning: Labour's focus on reforming the planning system and investing in planning departments is crucial for accelerating housing development. William Beardmore-Gray of Knight Frank emphasised the need for a stable policy footing. "Demand from buyers should strengthen as mortgage rates fall, but the new government also needs to play its part by making ambitious changes to the planning system."

Chartwell Noble's Perspective - how will it impact on our clients and the premium and prime market locally?

At Chartwell Noble, we see the potential for positive change in the property market with the stable position we now find ourselves in. Managing Director, Ross D'Aniello feels up-beat: "We have had years or uncertainty for a variety of reasons. For the immediate future we hope to see the market settle and a sense of calm being restored, we are bracing ourselves for a surge of activity in the coming weeks." Ross urges caution, however, "It is still essential to be sensible when it comes to pricing - houses over £1m are especially price sensitive right now, and homeowners need to be aware of this."

Director, George Pickard, commented, "Labour's commitment to building more homes and reforming planning rules aligns with our mission to provide high-end rural and urban properties. We look forward to working with land-owners, developers and other professionals to help the region meet it's housing shortfall." Recent years have seen strong activity, but George is hoping that we are entering a new phase; "Developers have been land-banking sites and delaying their build programmes for a while now, with the finance markets and lenders being unpredictable when it comes to rates. Consistency is the key to confidence, and confidence is the key to favourable lending rates which will trigger buyers and developers into action."

Stuart Bass, Director, has noticed a divide in the market: "Properties below £1m are getting plenty of interest and sensible offers are flying around. Anything over £1m though it has been a very different market in recent months." All is not lost though, "Whilst we are seeing less activity at over £1m, the activity we are seeing, for the large part, is positive. It is very clear that there are a lot of "downsizers", and plenty of cash buyers who have put themselves in a strong buying position. The key is to seize the opportunities when they arise and be realistic on price."

George continues, "With regards to the Premium, Prime & Super-Prime Property market in the region, we have already seen enquiries significantly improve, even prior to the election. Once the inevitable outcome was becoming clear the activity increased. Other large events often have a light impact, but this year has been heavily blighted by the election, the Euros and not least the weather. With what's to come we are gearing up for a busier second half to the year.

Ross concludes: "The value of Prime, Super Prime and Premium properties have taken a bit of a hit in recent years since the post covid surge - merely returning to normal levels. It is essential that homeowners understand the difference between the value of a property, rather than what they feel they 'need' to achieve. The value of the asset is not dictated by the needs of the homeowner, it is set by the market. The coming months will potentially yield great successes for those home-owners who take the right strategic approach to selling their home."

Looking Ahead

As the market evolves, Chartwell Noble remains committed to providing exceptional service and leveraging new opportunities for our clients. We will continue to monitor developments closely and adapt our strategies to ensure we meet the needs of buyers and sellers in this new landscape.