As the dust settles, what does Labour's landslide victory mean for the property market?

The General Election has been and gone, and whilst the result had been very much anticipated across the board, and not least? throughout the property industry, the outcome has perhaps been even more extraordinary than expected. As the dust settles, many householders, and particularly home owners, are asking what it might mean for them and their property - particularly in terms of property prices and what it might mean to anyone wishing to move home.

Here is a summary of my thoughts:

Property Prices??

There is a market expectation that property prices may now increase following a fairly flat second Quarter to June 2024 - indeed seeing a slight drop from May to June, albeit amounting to only around a ￡500 fall on average; this is according to the Halifax. The annual rate of house price growth has been at 1.6%, and is likely to now accelerate through the rest of 2024 and into 2025 as consumer confidence returns and mortgage rates fall. Several lenders, including Halifax, HSBC, Barclays, Santander and NatWest, have cut their mortgage product rates this very week, perhaps in anticipation of falling Bank of England base rates through the second half of this year - maybe starting to come through as early as the next meeting of the Monetary Policy Committee in August.

Renters Reform?

Labour has signaled its intention to bring in reforms that will impact the property market - and perhaps it is therefore a question of 'when' not 'if' this will happen. We are likely to see a push for a more radical version of the proposed Renters Reform Bill that didn't quite make it into legislation before the election was called. This will include a scrapping of Section 21, which was already planned, but may perhaps include rent control legislation also - something that many letting agents and, perhaps more so, landlords are concerned about. As more private sector landlords move to sell off their rental properties ahead of any stringent reforms, it only puts pressure on an already over-competitive rental market, forcing rents higher and perhaps defeating a lot of the object. The industry is calling for clarity from the incoming government and urging it to work with industry experts to ensure that any reform is fair and workable for both tenants and responsible landlords, and can be sustained for the years that follow.

Tax and Planning Reform

Labour has pledged to build 1.5 million new homes within five years, in a bid to create more affordable housing. It is an ambition that has been shared by successive governments but never met, however Labour's proposals include reforms to the planning process, making it far easier for developers to build on Brownfield and Grey-Belt sites, and even includes relaxing restrictions to building on Green Belt. This does not mean tarmacking areas of outstanding natural beauty, but nevertheless many homeowners in more rural settings, particularly with views of green spaces, are naturally a little alarmed over these proposals. At the moment, as an industry, we wait for further clarity on how these proposals will bear out in legislation.

Tax Reform is another question mark, with suggestions that stamp duty may be reformed at last to make home ownership more accessible to younger buyers and downsizing easier for lower income pensioners, although there may be increases in stamp duty for second home purchases, and especially to buyers from overseas. A worry to many home owners is the notion of Capital Gains Tax being levied on the sale of primary residences, as opposed to only second properties as has been the case previously, and this may stimulate a sales market in the early part of this parliament as home owners bring potential future moves forward, in order to beat the introduction of any such policy.

For updates on the property market and what it might mean to you, please follow my social media - @thepropertywaller - for regular news and views, or contact me for advice at any stage - I am always happy to help.