With Labour now in government, there's a new set of policies and promises on the horizon, particularly in the housing and property markets. Their manifesto outlines ambitious plans to tackle housing affordability, renters' rights, and homelessness. However, implementing these changes, especially in places like Crediton, raises many questions. But before we dive into those, let’s look at the recent impacts of the election.

Impact of the General Election on the UK Property Market

Despite the anticipation and uncertainty around the general election, the UK property market has remained strong. In June, house prices for homes sold were steady at £348 per square foot, a 5.1% increase since December 2023. This shows the market’s resilience despite political changes.

Property listings have also risen, with 35,600 UK listings recorded this week, a 7.5% increase compared to the average from 2017 to 2020. This suggests that homeowners remain confident and continue to list their properties.

Sales figures paint a positive picture too. Gross sales reached 26,198, which is 6.9% higher than the average from 2017 to 2019 and 6.4% above the 2024 weekly average. Net sales stood at 20,028, marking a 20.8% increase compared to the same week in 2023. Although there has been a slight rise in sale fall-throughs at 23.5%, this is still below the seven-year average of 24.8%, indicating market stability.

In summary, the general election has not significantly impacted the UK property market. House prices continue to rise, listings and sales have increased, and the market remains strong, providing a positive outlook for homeowners and landlords.

Addressing the Housing Shortage

Labour aims to build at least 150,000 council and social homes each year to tackle the severe shortage of affordable housing. This means more people will have access to secure and decent homes. Many of these new homes will be council houses, offering affordable options for families and individuals. However, there are concerns about the feasibility of this ambitious goal, especially regarding funding.

Labour’s manifesto includes reinstating housebuilding targets for local authorities, hiring 300 more planning officers funded by increased stamp duty for overseas buyers, and selecting sites for new towns by year-end. They also plan to revise compulsory purchase rules to eliminate 'hope value', reclassify some green belt areas as 'grey belt' for potential development, give local buyers priority for new homes, and propose a permanent mortgage guarantee scheme.

While these ideas have potential, Labour’s approach faces challenges. Using compulsory purchase powers could help provide affordable housing, but balancing property rights and addressing opposition from local communities will be difficult. Previous governments have struggled with ambitious housebuilding plans, and Labour's stance on issues like nutrient neutrality rules remains vague, raising doubts about their ability to implement these changes effectively.

Enhancing Renters’ Rights

Labour plans to abolish Section 21 evictions, which will provide more stability for renters. However, this change will only be implemented after the courts are reformed, which could take years. Labour also intends to introduce rent controls to cap excessive rent hikes, though this has proven contentious in other markets. Historical data from Scotland and elsewhere suggests that rent controls often lead to decreased investment in rental properties and a reduction in the overall quality of available housing.

Other key Labour measures include ending bidding wars for rental properties, capping upfront payments required to secure a rental, and mandating that all rental homes meet an EPC rating of C or above by 2030. These policies aim to provide more stability and affordability for renters, with Labour estimating that energy efficiency improvements could save tenants £250 annually. While these changes benefit tenants, they also impose new responsibilities on landlords, requiring them to invest in property upgrades and adhere to stricter rental practices.

Another significant change for the rental sector is the creation of a national landlord register. This initiative aims to improve standards and accountability in the private rental market, ensuring landlords maintain their properties to a decent standard.

Supporting First-Time Buyers

Labour’s manifesto promises to support first-time buyers by reducing barriers to homeownership. This includes increasing the availability of affordable housing and offering financial incentives. Such measures could stimulate market activity and make it easier for young people and families to purchase their first home, although the specifics of these policies remain vague.

Promoting Housing Standards and Sustainability

To ensure all homes provide a safe and decent living environment, Labour plans to enforce a Decent Homes Standard. This standard will focus on improving safety, decency, and energy efficiency, setting clear criteria for what constitutes a 'decent' home. Additionally, millions of homes will be retrofitted to enhance energy efficiency, reduce carbon emissions, and lower energy bills. This initiative reflects a strong commitment to sustainability, which could also create new opportunities and challenges for the property market in Crediton.

Tackling Homelessness

Labour is committed to ending rough sleeping within five years by increasing support and housing options for people experiencing homelessness. This pledge highlights a significant focus on social welfare and community well-being.

Regulating the Housing Market

Labour also intends to reform land and property taxes to ensure fairness and efficiency in the housing market. Additionally, they aim to curb property speculation and reduce the number of vacant homes by imposing higher taxes on empty properties. These measures could stabilise the market and make housing more accessible.

Implications for Crediton Landlords and Homeowners

These policies will bring changes, especially for Crediton landlords. Increased regulation, particularly in the rental sector, will require landlords to ensure they are getting the most value from their investments. With some of these changes on the horizon, Crediton landlords should seriously consider making necessary adjustments in the coming months. Call the office on 01363 777999 if you need any advice.

The push for affordable housing and support for first-time buyers might alter market dynamics in the rental and lower-priced starter home markets, potentially impacting property prices and rental rates. Furthermore, focusing on energy efficiency and sustainability will likely lead to new opportunities and challenges in property development and management.

For Crediton homeowners, the changes are expected to be minimal. Building more homes will temper house price growth, but this isn’t always a bad thing. People tend to move when they need to, not based on house prices. So overall, significant changes for Crediton homeowners over the next five years are unlikely.

In conclusion, while Labour’s manifesto presents a comprehensive plan to address housing issues, it will likely take time before significant changes are felt in Crediton. Landlords should prepare for a slightly more regulated environment, but given the gradual increase in regulation over the last decade, the immediate impacts may be limited as the government navigates the complexities of implementing these ambitious policies.

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