Labour Landslide...What's next for the Property Market?

After weeks of campaigning, the general election is done. The worst-kept secret of 2024 is out. We have a new Labour government in the UK, with the party winning by a landslide.

Whether you’re pleased, disappointed, or indifferent, the fact that the election is done should be good news for the market. Property markets don’t like uncertainty. Now, we have a clearer idea of the government’s plans for the next five years.

History often shows that property markets tend to pick up after elections – whatever the result. This could mean that, once the summer holidays are over, there could be a bounce in the market.

What will happen to mortgage rates?

Most experts have been predicting the Bank of England’s (BoE) base interest rate will fall this year. The election might have influenced their recent decision to keep it on hold. With the election out of the way, they might start decreasing rates as soon as their next meeting on 1 August.

Forecasts suggest the interest rate could drop from 5.25% to 4.5% by the end of the year and hit 4% by the end of 2025. If mortgage rates follow suit, mortgages could get cheaper soon, tempting more people to move.

What are Labour proposing on housing?

Labour’s manifesto includes big housing pledges: building 1.5 million new homes, including more affordable and social homes, over the next five years. They plan to achieve this by tightening housing targets, reforming the planning system, building on ‘grey belt’ land, and creating new towns.

For renters and investors, Labour plans to reform the rental market, likely meaning more regulation for landlords and more security for tenants. They also pledge to introduce further leasehold system reforms, beneficial for those selling or buying leasehold properties or extending leases.

What the result might mean for first-time buyers

Labour plans a Freedom to Buy mortgage guarantee scheme, similar to existing Help to Buy schemes, helping first-time buyers get a mortgage with just a 5% deposit. This will be permanent, aiming to help 80,000 young people buy a home over five years.

Will we be richer or poorer?

Labour has committed not to raise income tax, National Insurance, or VAT. However, they haven’t ruled out changes to other taxes like capital gains tax, inheritance tax, or council tax. The new Chancellor’s first budget will reveal more.

Should you buy, sell, or move home right now?

With a new government, we have a bit more clarity on the future. However, it’s best not to rely too heavily on political promises. Focus on your circumstances: Do you need to move? Do you want to move? Can you afford to move?

A good estate agent can help you make an informed decision. If you’re thinking of selling, they can provide a good estimate of your home’s value and help find the right buyer. If you’re buying, they can show you available properties within your budget.

Contact us today if you’re considering moving now that the election results are in.