With the recent electoral victory for Labour and their subsequent policy announcements in the King's Speech, the property market stands on the cusp of some potentially transformative changes. The government's commitment is clearly focused on addressing some pressing issues, largely relating to residential properties and the rental market.
The main policies they have been highlighting in their early days in office can be split into five key areas:
- House Building Initiatives: Labour has not only promised to increase the housing supply by building 1.5 million new homes but has also committed to significant reforms in the planning process to expedite these developments. This includes revising the National Planning Policy Framework to restore housing targets and a strategic shift to utilize brownfield and greenbelt lands more effectively. Such measures are anticipated to alleviate the housing shortage which will in theory have a knock on effect that is likely to stabilise market prices.
- Changes to Stamp Duty: In a move that is likely to be popular among first time buyers, Labour has implemented a reduction of the first-time buyer stamp duty threshold from £425,000 to £300,000, which will be effective from April 2025. This policy aims to make home ownership more accessible, although it may still leave buyers in high-cost areas such as London and the South East with a tax burden to consider.
- Renters Reform Bill: The Renters Reform Bill is set to be reintroduced, aiming to abolish "no-fault" evictions and establish a more equitable environment for renters. This bill is seen as a crucial step towards creating a balanced and fair rental market, addressing long-standing issues of tenant stability and landlord rights. There will certainly be question marks over how closely this will resemble the previous failed bill, or whether it will look completely different, with the full implications of these changes depending on the details of the legislation as it is developed.
- Leasehold and Commonhold Reforms: Expectations are high for the Labour government to advance significant reforms in the leasehold sector, with a push towards commonhold becoming more prominent. This includes legislative actions that may potentially phase out the leasehold system for new properties, marking a fundamental shift in property ownership and management practices. Whilst lucrative for many freeholders, the leasehold system in this country has been viewed as a problem for some time, with a lot of theories on how to address it. This could be one of the biggest changes ever undertaken in the property market.
- Regeneration and Development Funding: A significant financial commitment has been made towards regenerating urban areas and developing new housing. This includes funding for the Affordable Homes Programme and investments in key regions to support housing and economic growth. The government is also setting aside substantial funds to unlock new homes on brownfield sites across England, aiming to create vibrant new communities
Overall, the property market has shown initial signs of cautious optimism. The proposed changes are expected to introduce new dynamics into the market, encouraging both growth and stability. As these policies begin to take shape, their impact on both housing affordability and investment opportunities will become clearer.
The Labour government's robust agenda for housing and rental reforms could indeed herald a new era for the UK property market. At Eightfold Property, we remain committed to keeping you informed and well-prepared to navigate these changes. We will bring you updates as we can through our usual update channels, or feel free to sign up to our newsletter here.
Photo by Greyson Joralemon on Unsplash
For further information on housing policy, see updates on gov.uk