What does a labour government mean for the UK housing market?
The Labour Party's recent victory in the General Election promises changes in the property sector.
According to Labour’s manifesto and campaign promises, we can anticipate immediate legislative reforms in the rental market.
Key among these changes is the promise of the immediate abolition of Section 21 'no fault' evictions, alongside measures to enable leaseholders to contest unreasonable rent hikes. In order to achieve this there is a lot of work to be done to reform the court system, so at present it is yet to be seen how this will be achieved.
Building safety is another priority, with Labour committed to enhancing safety standards and implementing minimum property standards. The extension of ‘Awaab’s Law’ is also on the agenda, mandating landlords to address damp, mould, and other health hazards within specified timeframes.
Leasehold reform is expected to be more gradual. Labour aims to review and ultimately abolish the feudal leasehold system, potentially banning new leasehold flats and promoting commonhold as the default tenure.
Labour have promised to deliver a planning change to build 1.5 million in the next five years, at a level of 300,000 homes a year. With the housing market being demand driven, it will be largely down to developers as to whether they see the demand in the market to build and deliver to these targets.
For those invested in the housing market, there is cautious optimism. The new government is expected to bolster market confidence, potentially leading to a steady rise in house prices and anticipated interest rate cuts.
Changes to Stamp Duty are also on the horizon, though any reforms will be detailed in the new Labour government’s first budget and are unlikely to affect current property transactions.
With these upcoming reforms, the property market is poised for a period of cautious optimism, driven largely by any upcoming changes to mortgage rates. The Labour Party have promised commitment to transforming housing legislation and improving standards for all which, if delivered, could result in some positivity for UK housing.
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