What the new Labour Government means for the property market

Labour leader Sir Keir Starmer will have the removal vans booked this morning after the General Election result.

Sir Keir is set to move into Number 10 after Labour won the General Election by a landslide yesterday.

Election results are still coming in this morning and the first Budget and fiscal update may not come until at least September, which is when Labour is likely to unveil its major political announcements.

It is so far unclear what will happen on estate agency-specific issues such as regulation and recent parliamentary reviews into the homebuying and selling process. But the Labour Party election manifesto already gives an indication of what agents can expect.

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.”

Source: https://www.estateagenttoday.co.uk/breaking-news/2024/7/what-the-new-labour-government-means-for-the-property-market

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