What Could a Labour Government Mean For The Housing Market?
This week, Rightmove had an exclusive conversation with Sir Keir Starmer regarding Labour’s housing promises, asking him how they would benefit home-movers. You can read his responses here.
With a Labour government now confirmed, we examine their housing market pledges in greater detail.
Building new homes Labour plans to construct 1.5 million homes over the next five years and to update the National Policy Planning Framework.
Stamp duty Currently, first-time buyers pay no stamp duty on homes priced up to £425,000. However, this relief is set to end next year. Previously, the threshold was £300,000. Labour intends to maintain the current stamp duty exemption for first-time buyers but has not committed to extending it beyond the March 2025 expiry date.
Help for renters Labour has pledged to ban no-fault evictions. They also aim to extend ‘Awaab’s law’ – currently applicable only to social housing – to the private rental sector, requiring landlords to address reported health hazards within specified timeframes. Additionally, Labour intends to empower tenants to challenge unreasonable rent increases.
Help for first-time buyers Labour hopes to assist 80,000 more people in purchasing their first home through a comprehensive mortgage guarantee scheme and by offering ‘first dibs’ to locals seeking to buy their first home in new developments.
Mortgages Labour has proposed a ‘Freedom to Buy’ mortgage guarantee scheme for first-time buyers with smaller deposits. They have also committed to keeping mortgage rates as low as possible.
Making homes greener Labour plans to ensure that all private rental properties achieve an EPC C rating by 2030, without mandating the removal of old gas boilers. They also propose a national Warm Homes Plan over a decade, potentially affecting up to 5 million homes, with the aim of eliminating fuel poverty by 2030.
Other housing legislation Labour has pledged to reform the leasehold system, making commonhold the default tenure for new-build flats and banning new leasehold flats.
Commenting on the election result, our property expert Tim Bannister said: “The certainty of having the next government in place will benefit the market, and we await the prioritization of housing policies. Our data shows a slight increase in home-mover activity following an election, which might occur this year as well, especially with a potential Bank Rate cut and decreasing mortgage rates on the horizon.
“It is crucial that the government considers the broader market impact of new policies, as a policy designed for one group can have repercussions for others. Rightmove questioned Keir Starmer about his housing plans earlier this week, and it is encouraging to see Labour’s manifesto focus on building more homes and planning reform. Creating more homes quickly, while maintaining quality, is essential to meet demand.
“We believe there is an opportunity to further support first-time buyers. While a permanent mortgage guarantee scheme offers certainty, our research indicates that only a small number of first-time buyers might benefit. Making the existing stamp duty thresholds permanent for first-time buyers would be a good start, and innovative solutions to help with deposits and borrowing capacity should be explored.”