Sir Keir Starmer will become the next Prime Minister of the UK after the Labour party’s landslide win at the general election.
Officials in the property and mortgage sectors have largely welcomed Starmer’s victory and said housing needed to be a central focus of the new government’s strategy.
Housing at the centre
Ryan Etchells, chief commercial officer at Together, said now there was certainty over the next administration, there needed to be “strong leadership” followed by “swift action and delivery on promises made”.
He said: “Top of the agenda should be looking at boosting the UK’s housing stock, which has not kept pace with our increasing population to such a level in recent years that we are now in a deepening housing crisis.
“Before the election, Labour vowed to build 1.5 million homes over the next Parliament – effectively re-instating the previous government’s 300,000-a-year targets. But to achieve such ambitious numbers, we need to see real change.”
Etchells said there needed to be a “radical overhaul of the broken planning system”, as well as incentives for SME housebuilders to develop homes.
“The new government needs to take bold measures to stimulate regeneration of empty and disused property, such as introducing tax breaks. Overall, we need to see much greater collaboration between local authorities and developers to form a faster response to the ever-increasing demand,” he added.
Propertymark also said it was “crucial” that Labour puts housing at the front and centre.
The association said it was “vital all manifesto promises are backed up with full transparency and a deliverable timeline on set ambitions over the coming weeks”.
Propertymark said there should be a “wide-ranging overview of how different demographics will be catered for within the housing mix”, adding that it wanted to see how the Labour party would assist first-time buyers as well as the wider housing sector and rental market.
Mobeen Akram, new homes director at Mortgage Advice Bureau (MAB), said: “Labour now has the opportunity to push forward and give the housing sector a much-needed boost. In the first 100 days of government, we hope to see a number of proposals come into play – most notably, kickstarting the promise to build 1.5 million new homes over the next decade.
“It’s now up to Labour to take decisive action and differentiate itself from its predecessors.”
Robin Rathore, CEO of Bamboo Auctions, said although Labour’s victory seemed certain, there was less confidence in “how they will help solve some of the systemic problems in the housing and property market, so the first 100 days of government will be crucial in setting out how serious Labour is about change and progress in the sector”.
He said, regardless of whether people agreed with Labour’s policies, “at least the property sector now has clarity of vision and certainty of direction for the country for at least the next five years”.
Rathore added: “This will create more stability, more confidence and ultimately more liquidity in the property market.”
Labour stability to bring housing market boom
Nigel Bishop, founder and managing director of Recoco Property Search, said the result had led buyers to follow through with housing plans.
He said: “In the run-up to the general election, we already saw house hunters, who previously paused their activity to observe the political development, resume their search. Now that a party has been elected and economists predict a likely interest rate cut over the coming months, we expect further buyers to follow suit.”
Paresh Raja, CEO of Market Financial Solutions, said: “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 1 August.”
Richard Harrison, head of mortgages at Atom Bank, said general elections usually brought a sense of uncertainty, so it was good to have a “definitive result”.
He added: “A general election always brings with it a sense of uncertainty, so it’s welcome to have such a definitive result. The size of the majority should allow the new government to push on with addressing some of the issues faced by the property market.
“I’d like to see time given to whoever is appointed housing minister, given the way it has been a revolving door in recent years – the outgoing Lee Rowley was the 15th housing minister since 2010.”
Harrison said: “More than anything, I think the mortgage sector will relish some stability. The ongoing uncertainty of the last few years has taken a toll on borrowers, who today face higher interest rates when their finances are already stretched.
“Some economic calm, and the prospect of base rate cuts in the months ahead, will be welcome.”
What will a Labour win mean for mortgages?
Nick Mendes, mortgage technical manager at John Charcol, predicted there would be no sudden changes in mortgage rates.
He said: “While Labour’s housing and economic policies aim to support lower mortgage rates and greater accessibility for first-time buyers, the overall impact will depend on the market’s perception and the successful implementation of their proposed policies. From our current position, we do not expect to see the volatility of recent years.
“With inflation expected to near the Bank of England’s 2% target, Labour will be in a fortunate position to be the government in power as mortgage rates continue a downward trend.”
Mendes predicted two 0.25% base rate cuts by the end of the year, “with a possibility for a third cut”.
“These measures are expected to stimulate growth, enhance consumer and business confidence, and maintain inflation targets, setting the stage for a robust economic recovery and financial stability,” he added.
Mendes also said the spread between two- and five-year fixed mortgage rates would narrow, and headline five-year fixed rates could drop to 3.75% while two-year fixed rates could decline to 4% by the end of the year.
Shekina is the deputy editor at Mortgage Solutions and commercial editor at Mortgage Solutions and Specialist Lending Solutions. She has nearly eight years of experience in the B2B publishing market, having previously covered the hospitality, retail, pet, accounting and jewellery sectors.
Shekina has worked for Mortgage Solutions and Specialist Lending Solutions for almost five years. Here, she covers the market’s breaking news stories, engages with professionals in the sector, and oversees any commercially agreed content in partnership with mortgage-related companies.
This includes presenting webinars and hosting roundtable discussions on developing themes in the mortgage sector.
She is an NCTJ-trained journalist and was nominated for the Headline Money Awards Mortgage Journalist of the Year in 2021.
In her spare time, Shekina likes to read, travel, listen to music and socialise with friends.
She currently reports on current events in the mortgage market and liaises with financial clients to produce sponsored content.
Follow her on Twitter at @ShekinaMS
