What we expect for buyers and sellers now Labour is in power

9th July 2024

If you are looking to purchase or sell a property, it’s worth understanding the housing policies that the new government has proposed to introduce, as it may impact your property decision making. So far, all is looking positive.

The first piece of good news is that the economy and financial markets have reacted calmly to the new Labour government. This is important because we are hoping that mortgage interest rates would be cut over the coming months, potentially dropping down to c4.5% by the end of the year, and this seems likely.

The other good news is that most property markets around the UK are in equilibrium with enough buyers out there for deals to be struck, but not so many that prices are being pushed up by multiple offers. That means it’s a great market for sellers who price their property correctly, and for buyers willing and able to make a fair offer for their next home.

What can buyers and sellers look forward to over the next 6 to 12 months under a Labour government?
Most of the property indices - including Rightmove, Nationwide and Halifax – are showing prices starting to rise slightly, by around 1% year on year. And the key hope over the next few months is that mortgage rates will start to fall, making buying a bit more affordable.

As a result, now is a good time to buy and sell. If mortgage rates fall as expected and the economy continues to be stable, the market should get more buoyant as this new government – which is keen to support the housing market - puts in place its plan of action.

Looking for a new home? Labour is planning to encourage 1.5m over the next five years
One of Labour’s most welcome promises is that they will make significant changes to the planning system. This should support the building of more new homes – across the private, affordable and social housing sectors - giving prospective buyers a better choice and aiding wider economic growth. And, if you fancy living in a truly 21^st Century environment, that may well be available in the future, with Labour’s promise to create whole new towns.

Support for First Time Buyers
Labour is aiming to be supportive of people looking to get on the ladder. The temporary £425,000 zero-rate stamp duty threshold for FTBs, which has been particularly helpful for those living in high-priced cities such as London, is due to stay in place until the end of March 2025. The Conservatives had pledged to make this relief permanent, and we will find out soon whether Labour will do the same.

There is also a plan to extend the current mortgage guarantee scheme that is due to end in mid-2025, in order to continue helping FTBs with smaller deposits and lower earnings get on the ladder. Not only would this reinvigorate ‘Freedom to Buy’ mortgage be good news for FTBs, but the aim is to make it a long-term offer so that those wanting to buy in the future can plan to save, knowing exactly what financial support they will be able to secure.

The EPC rating will become increasingly important
Prior to the election, the Conservative Government wanted to improve the energy efficiency of all homes to an EPC rating of C or higher. And with Labour promising to commit even more money and effort to reaching Net Zero, it’s likely that we will see an increased focus on EPCs over the next five years.

So, if you are selling a home, do what you can to make sure your EPC rating is as high as possible – ideally C or above – as that will be more appealing to buyers.

Continuing leasehold reform
Finally, if you are looking to sell or buy a leasehold property, the new Leasehold and Freehold Reform Act may help support your purchase/sale, and it’s likely that the Labour government will further improve the rights of leaseholders, which is good for both buyers and sellers.

Although Labour has promised to completely abolish the leasehold system in the future, they acknowledge that it would be difficult to achieve in the short-term. Existing leasehold arrangements can’t just be abolished, as the last government found. However, what Labour can do is influence new builds, and there is a distinct possibility that new-build flats (as well as houses that might have been leasehold) will have a ‘commonhold’ tenure instead, where all the owners share the freehold and work together to manage the building.

If you have any questions or concerns about whether now is the right time to buy or sell, we’re always here to help. Just get in touch with your local branch and have a chat with one of the team.