Labour Party's triumph in the General Election this July 2024, has some very ambitious plans. As a result, we should be expecting substantial changes to the property market within the year. These changes could impact both sellers and buyers, from housing policies to taxes. Starmer’s vision aims to address longstanding issues and only time would reveal whether these plans are more reasonable leading to a more reasonable and accessible property market for all.
Section 21
The Labour Party decision to abolish Section 21 [‘no fault’] evictions has left landlords feeling uneasy. Abolishing section 21 would leave landlords needing to prove ‘reasonable grounds’ to end a tenancy, under section 8. Section 8 evictions are ‘discretionary’ requiring the parties to attend court. With current record waiting times for eviction hearings, maintaining confidence will depend on how far Starmer can improve the court system to make it quicker and more efficient. In Interlet’s view this change risks alienating landlords already hit with major changes to tax rules and increased regulation on safety and licensing. By the laws of supply and demand, fewer landlords will mean higher rents.
Stamp duty
There is no doubt that first-time buyers have faced the hardest conditions in years with the average house price increasing by over 60% since 2010. Labour has announced that they will lower the Stamp Duty threshold for first-time buyers from £425,000 to £300,000 in April 2025, this change may impact first-time buyers. Overseas buyers will be expected to pay an extra 1% stamp duty surcharge, reflecting the governments balancing act between attracting and deterring overseas capital. Interlet is of the opinion, this would be a grave mistake as we need overseas investors to drive the economy.
Freedom to buy
Labour plan to rebrand the Conservative’s mortgage-guarantee scheme to a freedom-to-buy scheme, aiming to help 80,000 young first-time buyers get onto the property ladder. We should be expecting the governments help by acting as a guarantor for prospective buyers who can’t afford large deposits and encouraging lenders to offer deals for smaller down payments.
New homes, new towns
Our new government don’t plan on stopping there, they also propose to build 1.5 million new homes over the next 5 years, re-instate mandatory housing targets and more sustainable developments. They aim to work with locals in improving poorly performing areas, build new communities with new homes and greener spaces.
The Labour Party’s victory in the General Election has paved the way for Keir Starmer and his ambitious plans. Promising or over-promising substantial changes to the property market, such as, addressing the constant issues for first-time buyers, abolishing longstanding legislations, committing to long-term improvements in housing availability and quality. We just need to wait and watch what they deliver.
