It's no surprise that the Labour Party won the general election, due to the dissatisfaction with the former Conservative Government. Still, we don't think anyone expected it to be such a landslide victory for Labour.
The Labour Party gained 211 seats in parliament, mainly from the Conservatives who lost 250 seats, with the Liberal Democrats also benefiting from dissatisfaction with the Conservatives, gaining 63 seats, and even the Reform Party picking up a few seats.
Fears over Labour election win’s impact on private rented sector, Landlords and letting agents are fearful of onerous new regulations in the aftermath of a Labour victory.
Property professionals are worried that the incoming Labour government could cause damaging changes to the Private Rented Sector (PRS). A nationwide survey conducted by Leaders Romans Group has captured growing anxieties about the potential impact of any new legislation.
The results reveal significant concerns over proposed rent controls, property taxes and regulatory changes, urging political leaders to consider the far-reaching implications of their policies. The survey, which was conducted just before the general election, gathered responses from more than 1,200 landlords and tenants across England and Wales.
REDUCTION IN RENTAL PROPERTIES
One landlord commented, “a balanced and fair Renters (Reform) Bill is essential for the stability of the rental market. Overly stringent regulations could discourage investment and reduce the availability of rental properties.”
Another landlord expressed concern over proposed rent controls, stating, “rent controls might seem beneficial in the short term, but they could lead to a reduction in the quality and quantity of available rental properties. This could hurt both landlords and tenants in the long run. Overly stringent regulations could discourage investment and reduce the availability of rental properties.”
The survey results showed that 60% of landlords are particularly worried about potential increases in property taxes, which they believe could lead to higher rental prices.
Additionally, 45% of respondents expressed concerns about the introduction of new regulatory measures that could complicate the rental process.
Now the Election is over, the real work begins for agents
"With the Election finally settled and Keir Starmer installed in No.10, stability will be good news for the housing market", says Steve Richmond.
On balance, a stable new government with a large majority is good news for the sales market. Labour’s costed spending plans, coupled with new Chancellor Rachel Reeve’s prior experience at the Bank of England, will help reassure markets and investors that economic stability will be prioritised. These factors should play well with the money and housing markets, helping to stabilise or even lower the cost of borrowing through lower interest rates – factors that will help stimulate the post-election sales market.
PLANNING REFORM
Promises from Labour on mortgage support for first-time buyers and reform of planning laws will take time to deliver. However, as speakers commented at our recent election webinar, Labour’s immediate focus will be on high-impact changes that won’t add significant costs to the public purse. Across the property sector, this means one thing – enforcing better housing delivery standards through compliance with existing laws.
In the short term, we can expect an increase in enforcement rather than new laws. Expect a flurry of press releases from various government departments detailing the lengths they have gone to in protecting consumers from bad agents, conveyancers and landlords with stricter enforcement. This could take the form of a more determined enforcement authority (trading standards) cracking down on material information breaches, or local authorities enforcing compliance with EPC regulations and the obligation to provide tenants with all the required documentation before their tenancy commences or when an eviction notice is served.
Lettings will also be affected by the reforms Labour has pledged to undertake, Neil Cobbold, Reapit | PayProp’s Commercial Director, has commented in his assessment of the policies touching agents, landlords and tenants.
In terms of housing, Labour has pledged to develop 1.5m homes, reform planning rules, prioritise development on brownfield and what it calls “grey belt” land. It wants to extend an existing scheme, which helps people get a mortgage with a smaller deposit and is backing more rights for renters.
First-time buyers are set to see their Stamp Duty exemption reduced back to £300,000 from April 2025 and Labour has promised a Freedom to Buy scheme
Matt Thompson, head of sales at Chestertons, said “Labour’s announcement to lower the Stamp Duty threshold for first-time buyers from £425,000 to £300,000 in April 2025 has left many wondering if the party will introduce any major initiatives that will make it easier to get on the property ladder. Buyers will be looking for Labour to fulfil its pledge to introduce the Freedom to Buy scheme but are concerned that buying a first home continues to be challenging. Labour’s plan to increase the already higher Stamp Duty rate on purchases of residential property by non-UK residents by 1% is unlikely to have a major impact on London’s property market. The capital remains a global city that attracts international professionals and investors who will simply adapt their property search by lowering their budget or by buying in a part of the city where they get more property for their money.”
Another property market driver could be plans to add VAT to private school fees.
Nigel Bishop of Recoco Property Search said “this will leave many parents unable to afford private school education and inevitably impact on the property market by boosting demand for properties in close proximity to good state schools. Properties in these catchment areas can already ask a 20% premium and a politically-caused boost in demand for such homes will create an even more competitive market for buyers.”
However, Estate Agent Today has spoken to other property professionals who query whether parents would pay moving costs such as Stamp Duty and buying a new property just to save a few thousand pounds on extra school fees.
Propertymark said it is crucial that housing policy is placed front and centre for the Labour Party moving forward, as it looks to take on a term in Downing Street.
The agency trade body called for a wide-ranging overview of how different demographics will be catered for within the housing mix and said it is keen to see fundamental planning and support outlined to assist first time buyers on their property journey.
Nathan Emerson, chief executive of Propertymark, said “Propertymark welcomes wide-ranging engagement with the new Labour Government to help steer an objective pathway forward for the housing sector. We have seen a chronic undersupply of affordable new housing for many years. Sustainable housing is the foundation for any strong economy and there must be clear and well thought out plans that inspire investment and improve supply moving forwards. We want to see long-term cross-party cooperation that delivers the right kind of homes in areas they are desperately needed.”
One thing that agents do agree on though is that the market could be set to get more busy.
Bishop added “in the run-up to the General Election we already saw house hunters, who previously paused their activity to observe the political development, resume their search. Now that a party has been elected and economists predict a likely interest rate cut over the coming months, we expect further buyers to follow suit.”