Last week’s general election provided plenty of jaw-dropping moments throughout the small hours and beyond. But now that the dust has settled following Labour’s widely expected landslide, and as hundreds of freshly minted MPs take up their seats in the House of Commons, we look at what the implications could be for the property sector, for different groups of people.
Those who want a brand-new home
One key pledge from the newly elected Labour government is to build 1.5m new homes over the next five years, shake up the planning system and develop both brownfield and ‘grey belt’ areas. The latter are what Labour calls ‘poor quality’ patches of land, such as waste areas or disused car parks, on the green belt. (In fact, The Home Builders Federation has called for this definition to be further clarified.)
While brownfield sites will be the priority, and the government remains committed to preserving the green belt, it believes that this alone will not meet the nation’s need for new homes. And the government has promised to build ‘a new generation of new towns’, alongside ‘the biggest increase in social and affordable housebuilding in a generation’.
Propertymark, the leading membership body for property agents, to which we at Oakfield belong, has welcomed the proposals to tackle what it describes as a long-term ‘undersupply of affordable new housing’, adding that ‘sustainable housing is the foundation for any strong economy’.
Labour has also pledged to update the National Policy Planning Framework and restore compulsory housing targets. It will make sure there are up-to-date Local Plans, while reforming and strengthening the presumption of sustainable development. At the same time, there will be more planning officers, paid for by raising the rate of stamp duty surcharge which non-UK residents pay.
So if you’re sure you want to live in a new-build, you could be in luck.
Parents
Labour’s commitment to putting VAT on private school fees, perhaps one of its more controversial pledges, could increase demand for homes near good state schools, especially among parents who are no longer able to afford private school fees. However, that’s always been the case to an extent, and that doesn’t mean you won’t be able to find a great property close enough to the school of your choice.
If you’re a tenant
Labour has also promised to overhaul the private rental sector, stating in its manifesto:
“Security … means having a secure roof over your head. That’s not the case for too many renting their homes privately. Labour will … overhaul the regulation of the private rented sector.”
That includes:
- The abolition of section 21 or ‘no-fault’ eviction notices, with which a landlord can go to court to evict a tenant without having to give a reason. (For example, they may simply want to move back into the property.)
- Giving tenants the power to challenge ‘unreasonable’ rent increases.
- Taking steps to raise standards in the sector, including the extension of ‘Awaab’s Law’ to the private sector. (This requires social housing landlords to stick to strict time limits to address hazards like mould and damp in their properties. It is part of the Social Housing (Regulation) Act.)
So, again, there’s quite a lot here that could prove helpful if you’re a renter.
Leaseholders
We were pleased when leasehold reform came into being this year under the former Conservative government, although it did not ban leasehold on all new flats.
Labour proposes to abolish new leasehold flats, with commonhold as the default setting. It has also pledged to get rid of ‘unfair’ ground rent for current leaseholders.
There is an additional pledge to tackle the arrangement under which you purchase a property with a mix of leasehold and freehold terms, and where you typically own the land on which your home is built, but pay a third party annually or monthly to maintain it.
Finally, the new government will look into how to improve protection offered to leaseholders, which can only be welcomed.
First-time buyers and mortgage holders
Labour says it will work with local councils so that first-time buyers get priority when it comes to buying homes. This aims to avoid the situation that sometimes arises where overseas investors buy up properties before they’re finished.
At the same time, there are proposals to establish a permanent mortgage guarantee scheme. The existing such scheme encourages lenders to offer 95% mortgages, although most lenders currently do provide this. So, here, we’d perhaps welcome a little more clarity on how the government would change what is currently available.
Energy efficiency for everyone
The government plans to provide an additional £6.6bn, i.e. double the existing investment, to upgrade some five million homes. Its Warm Homes Plan is set to provide low-interest loans and grants to pay for insulation, solar panels, batteries and low-carbon heating with the aim of lowering energy bills.
Oakfield says
For us, as for everyone, the Labour landslide came as no massive surprise. But we certainly welcome the post-election stability, which is always going to help the property sector.
Clearly, no government can transform the sector overnight. And in some areas, as mentioned, we’d perhaps have liked to see a shade more clarity. But we broadly welcome the wide range of bold aims and ambitions which have been put forward for property in the UK, and we’ll be looking forward with interest to see how these are implemented in the months and years ahead.
Remember, Oakfield Estate Agents is here with offices across East Sussex, including in Eastbourne, Hastings and Bexhill-on-Sea, as well as Uckfield, Heathfield and Lewes, whether you’re a tenant, landlord, buying or selling feel free to get in touch for a chat about your property related questions. Check out our contact details here.