The Labour Party secured a majority victory in the 2024 general election, resulting in Keir Starmer becoming the new Prime Minister. Throughout his campaign he has been vocal on his view of property and housing in general, vowing to support 80,000 young people to get on the housing ladder over the next five years, and build 1.5 million new homes. He also stated that “having a place to call your own is the bedrock of security and aspiration”. With this in mind, and the appointment of Angela Rayner as secretary of state for levelling up, housing and communities, what are Labour’s plans for the property market?
\nFreedom to Buy scheme
\nFirst-time buyers Stamp Duty exemption set to be reduced back to £300,000 from April 2025
\n‘First dibs’ for local people on new developments
\nTax foreign buyers to fund planning officers
\nReform compulsory purchase rules, allowing councils to purchase land at lower prices
\nReforming leaseholds by banning new leasehold flats, and ensuring commonhold is the default tenure
\nFreedom to Buy
\nThe Freedom to Buy scheme is designed to assist those who can afford mortgage repayments but struggle to save for a deposit, meaning prospective buyers can put down a 5% deposit with a 95% mortgage backed by the government. Committing to a permanent mortgage guarantee scheme will not only support tens of thousands of first-time buyers, but could also help to stimulate the wider market, and instill confidence in lenders and developers. This, in turn, will facilitate more deals and accelerate housebuilding.
\nExperts note that while this scheme may help address one obstacle for first-time buyers, the larger issues of high mortgage rates and house prices relative to incomes remain significant challenges that need to be addressed.
\nLeasehold Reform
\nRishi Sunak’s government planned major reforms to the leasehold system. However, the election announcement led to the Leasehold and Freehold Reform Act being diluted to pass quickly before Parliament dissolved.
\nLabour aims to go beyond this legislation and the Conservative manifesto, by pledging to \"end the feudal leasehold system.\" They plan to implement the Law Commission’s recommendations on enfranchisement, right to manage, and commonhold, and in the short term, Labour wants to ban new leasehold flats and make commonhold the standard for apartment blocks. Owning a property in commonhold would allow you to own the freehold of your apartment and mean you share the ownership of and responsibility for common areas and services in your block.
\nThey also seek to regulate and reduce unsustainable ground rents and maintenance charges.
\nUntil Labour’s plans are firmly in place, the full impact on the sales market remains to be confirmed. However, it seems clear that Labour’s main focus is to provide the nation with more stability, which is also being translated into the property sector.
\nWe are committed to keeping you informed about the latest developments and how they might affect you. As the Labour government begins to implement its property and housing policies, we will provide timely updates and detailed analyses to help you navigate these changes and make informed decisions.
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