A new day, a new UK government – but will it be ‘business as usual’ under Sir Keir Starmer? Senior voices from across the property sector share their perspective with Estates Review.

Nathan Emerson, CEO of Propertymark, says Housing policy must play a central role from day one of the new government: “The UK has suffered a chronic undersupply of sustainable new homes for many decades and any new policies to increase housing supply must come with full disclosure on how and when developments will be delivered. For many years, the under supply of housing has pushed prices up for both homeowners and renters, and it is vital there is a plan to ensure supply keeps pace with real world demand.

“Across the next ten years it is expected the UK population will grow to around 70 million people and it’s essential there is a diverse mix of housing solutions available. Key aspects must include careful consideration to ensure all new housing is logically implemented in targeted regions and wherever possible, protect greenbelt areas.”

Paresh Raja, CEO of Market Financial Solutions, says: “The accepted logic is that elections bring uncertainty and are therefore bad news for the property market. But there have been some important differences this time around: Rishi Sunak called for the vote to take place a lot earlier than expected, and the result (a Labour victory) has seemed highly likely from the off. As a result, there has been less uncertainty than there could have been, and now the ballots have closed, we should see a prompt return to more stable, ‘business as usual’ conditions.

“There are enough signs to suggest the market is ready for a post-election uptick in activity. The number of homes coming onto the market in the first half of 2024 is 22.9% higher than last year, while economists are still predicting that the Bank of England will cut the base rate twice before the end of the year, with the first potentially coming on 1st August.

“But, despite these reasons for optimism, there is clearly no room for complacency. Political and economic turbulence remains, so lenders have to focus on supporting brokers and borrowers as best they can. Optionality and flexibility will be key in the second half of this year, and lenders have to commit to providing borrowers with the financial products they need to both benefit from any opportunities that a potentially more stable climate could provide.”

Jatin Ondhia, CEO of Shojin, says: “Labour’s ascendancy to Downing Street marks an important moment for the property sector. Several ambitious pledges regarding housebuilding and investment were made on the campaign trail, but now’s the time for Starmer and his party to back up their words with actions. Ensuring the UK continues to remain a global hub for investment needs to be a key priority, and the  real estate sector will remain a crucial market for attracting that inbound investment

“Labour has work to do: interest rates remain high, the cost-of-living crisis has left a toll on people’s spending power, and economic growth needs to turbo-charging. However, following a rather tumultuous end to the Conservatives’ 14 years in power, the UK now has a chance to reposition itself, building strong international partnerships and attracting global investments. Labour’s plans to reform the planning system and pave the way for affordable house building present significant opportunities for greater investment into property development, but the effective implementation of their promised reforms will be key.

David Hannah, Group Chairman of Cornerstone Tax, takes a different take as he urges the next government to prioritise and support the ambitions of prospective homeowners, with the following three viable solutions able to help the next government support Britain’s ailing housing market.

Arguing for the reintroduction of Multiple Dwellings Relief, he says:
“The abolition of Multiple Dwellings Relief (MDR) has generated yet another block for the UK’s property market to overcome, particularly for those purchasing multiple dwellings in a single transaction. The change will incur higher stamp duty costs for buyers, calculated on the combined property value rather than the average, adding thousands to their expenses. Homes with annexes will now attract double the stamp duty, with property investors now having to purchase six or more units to reap the benefits of SDLT relief. By abolishing MDR, Jeremy Hunt has, therefore, restored a historical injustice in Stamp Duty Land Tax. Furthermore, the already struggling construction industry will take another hit with the tax on developers increasing from 1-2% to 5%, leading to project abandonment and further increases in asking prices, as supply continues to lag behind an overwhelming demand for affordable housing.”
 
Addressing Local Sales Restrictions, he says:
“Reducing local sales restrictions will significantly bolster the UK’s housing sector by facilitating a more fluid and efficient property market. One key issue has been the rigidity and complexity of local planning systems, which often stymies the pace of new developments. By easing these restrictions, local councils could accelerate the approval process thereby increasing the supply of homes. This would help address the chronic undersupply that has plagued the market, with annual completions falling short of the government’s 300,000 target. An increased supply would stabilise house prices, making homes more affordable for first-time buyers and those on lower incomes, ultimately contributing to a more balanced and equitable housing market.

“Moreover, developers would be incentivised to invest in areas previously considered unattractive due to bureaucratic hurdles. This would not only increase the overall housing stock but also stimulate economic growth in these regions.”  

Advocating for changes to Stamp Duty, Hannah adds:
“Whilst the promise from the Conservatives to raise the SDLT threshold for first-time buyers marked a positive step in the right direction, a radical overhaul is necessary to get the bottom end of the housing market moving in the long term. SDLT payment bands have never been index-linked to house price inflation so an increase to these thresholds for all homebuyers would stimulate activity at the lower end of the property market.  Raising the threshold would have the benefit of taking more properties outside the scope of stamp duty, cutting the cost of acquisition for people looking to climb up the property ladder. 
 
“Those looking to purchase properties on the mid-to-high end of the property market would also have a chance to sell their low-end properties as a result of the increase in demand from prospective buyers, contributing to further momentum within the housing market.”