How a labour government will affect house prices - Estate & Lettings Agents - Worthing & Sussex

How a labour government will affect house prices

Election Impact on House Prices

Historical data suggests that general elections have a notable impact on house prices. According to a report by Compare My Move, house prices typically rise by an average of 4.6% in the 12 months following an election. This trend is even more pronounced when the election results in a majority government, with house prices rising by an average of 7.4% compared to just 0.5% in a hung parliament. On average, a Labour government sees a slightly larger rise, with house prices growing 1.1% more than under a Conservative government.

One of the critical factors influencing this trend is market confidence. A majority government often provides a sense of stability and predictability, encouraging investment in the property market. With Labour securing a majority, we might see a similar uptick in house prices, benefiting homeowners and investors alike.

Labour’s Housebuilding Plan: What It Means for the Property Market

The prospect of a Labour government brings with it significant promises for the property market, notably the ambitious target of building one and a half million new homes within the first five years of their term. This initiative, detailed in Labour’s housing plan, aims to address the chronic housing shortage and ensure that everyone has access to affordable and quality homes.

Boosting Housebuilding Targets

Labour’s housebuilding plan is not just about numbers; it’s about creating sustainable communities. By pledging to build a new generation of towns and fostering collaboration between different tiers of local authorities, Labour aims to streamline housing development across regional boundaries. This strategy is designed to address both urban and rural housing needs, ensuring balanced growth.

A significant bottleneck in housing development has been the lack of planning officers in local authorities. To combat this, Labour plans to increase the stamp duty surcharge on purchases by non-UK residents by 1%. While the additional £40 million raised may seem modest in fiscal terms, it is projected to be sufficient to hire 300 new planning officers, costing around £20 million. This move could significantly expedite the planning and approval process, making it easier to meet the ambitious housebuilding targets.

Support for Renters and First-Time Buyers

Labour’s housing policy also focuses on supporting renters and first-time buyers. The proposed extension of Awaab’s Law to the private rented sector aims to ensure that landlords address urgent repairs promptly, improving living conditions for many tenants.

For first-time buyers, Labour has pledged to help 80,000 young people onto the housing ladder through its ‘Freedom to Buy’ scheme. This initiative would extend the existing mortgage guarantee scheme, assisting those who can afford mortgage repayments but struggle to save for a deposit. This support could be a game-changer for many young people dreaming of homeownership.

Reforms in the Rental Market

Labour’s plans to reform the rental market are extensive and geared towards enhancing tenant rights and protections. One of the most significant changes would be the immediate abolition of section 21 ‘no fault’ evictions. This policy change would provide tenants with greater security and stability, knowing they cannot be evicted without a valid reason.

Additionally, Labour intends to give tenants the power to challenge unreasonable rent hikes, enforce minimum energy efficiency standards by 2030, and offer greater protections against exploitation and discrimination. These measures aim to create a fairer, more transparent rental market where tenants feel valued and secure.

Leasehold and Commonhold Reforms

Labour also plans to tackle issues surrounding leasehold properties. The party has committed to enacting the Law Commission’s recommendations on enfranchisement, the right to manage, and commonhold. This includes banning new leasehold flats and ensuring commonhold becomes the default for apartment blocks. Furthermore, Labour intends to crack down on unregulated and unaffordable ground rents and maintenance charges, addressing the problem of ‘fleecehold’ private housing estates.

Conclusion

Labour’s comprehensive housing plan represents a bold vision for the future of the UK property market. With its focus on increasing housing supply, supporting renters and first-time buyers, and implementing significant reforms, the plan aims to create a more equitable and sustainable housing landscape. For property investors, homeowners, and renters alike, these proposed changes could usher in a new era of stability and opportunity in the housing market.

As always, staying informed and prepared is crucial in navigating these potential changes. Whether you’re looking to buy, sell, or rent, understanding the implications of Labour’s housing policies will help you make the best decisions for your property journey; and we’re here to help you get to where you want to be.

Jacobs Steel are estate and letting agents with offices in Worthing, Findon, Lancing, Shoreham-by-Sea and Hove. We will guide you through the entire process, communicating with you every step of the way.

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