On 4 July in 2024, Labour gained a landslide election to type a authorities. From the offset, it turned clear that housing could be a giant coverage space. Now, one 12 months on from that momentous win, we wished to check out the housing market at the moment to see the way it’s been impacted by the Labour authorities and the way they’re measuring as much as their pledges.
The housing market
Knowledge from the UK Land Registry reveals that the common UK home worth in July 2024 stood at £290,000. By April 2025, when the most recent knowledge was launched, and costs seem to have fallen to £265,000. Many will put this right down to the top of the Stamp Obligation Land Tax vacation on the finish of March. This coverage meant Stamp Obligation could be launched at a lower cost threshold, subsequently growing the variety of properties which might grow to be liable to the tax. Transferring ahead, it will likely be attention-grabbing to see if this worth drop is a short-term response or turns into a extra sustained affect.
Encouragingly for a lot of consumers, rates of interest have continued to fall because the election in 2024. When Labour had been elected, the Financial institution of England fee was 5.25% whereas the present fee stands a full share level decrease at 4.25%. This could be seen as a optimistic for consumers and people with a mortgage, with borrowing set to be cheaper compared to this time final 12 months.
Maybe resulting from a mix of decrease home costs and falling rates of interest, the variety of transactions, in response to authorities knowledge, seen in Might 2025 (the latest knowledge), has elevated considerably compared to the month earlier than. Whereas April noticed 65,110 transactions, Might noticed a rise of 25% to 81,470. Nevertheless, you will need to observe a lower of 12% within the variety of transactions when comparability is made to Might 2024, earlier than the Labour authorities got here to energy. This year-on-year fall could also be because of the ongoing results of the top of stamp obligation vacation, with sellers needing additional rate of interest drops to encourage extra market exercise.
When wanting on the housing market as an entire, we see blended responses to the Labour authorities’s 12 months in energy. However how have their housing-specific insurance policies been acquired by the sector and are they on plan?
1.5 million new properties
In a big announcement final 12 months made with nice fanfare, the federal government introduced a dedication to construct 1.5 million new properties by the top of their present Parliament in 2029. The response was blended, whereas some raised considerations about the place these properties will go, others celebrated the constructing of a lot wanted housing. However how shut are they to hitting this goal? Estimates fluctuate.
Based on a authorities report printed on 20 Might, Houses England has surpassed its 2024/25 annual targets for the variety of new properties began (greater than 36,000), the variety of new properties accomplished (38,000) and the variety of potential properties unlocked (79,000). All of those figures noticed will increase compared to 2023/24.
Nevertheless, in their newest forecast, Savills anticipate the supply of housing to fall considerably. They anticipate to see 840,000 new properties constructed within the 5 years to 2028/29. This can go away the ultimate determine 42% decrease than the general goal. Savills observe the autumn in planning consents during the last three years and the necessity for persistence relating to the Planning and Infrastructure Invoice.
Planning and Infrastructure Invoice
This laws was introduced together with the 1.5 million new properties pledge to clarify how this a lot greater determine could possibly be achieved. By reforming the planning system, the purpose is to make it simpler and faster for planning permission to be granted, subsequently encouraging extra constructing. This can embrace the reintroduction of obligatory housing targets for councils, opening up ‘brownfield’ and ‘grey-belt’ land, and introducing golden guidelines for inexperienced belt of land, i.e. together with a sure variety of inexpensive or social properties and offering the mandatory enhancements to native infrastructure.
The invoice is at the moment going via a second studying within the Home of Lords, having handed via the Commons. Whereas some help the updates to the planning system and opening up of land, many considerations concerning the invoice have been raised. Issues embrace a worry that it might bypass native democracy by undermining the position performed by planning committees, the sharp enhance in housing targets in rural areas with insufficient infrastructure and a scarcity of expert workforce to construct the brand new properties.
The invoice continues to be mentioned and might be put to the King to be made legislation as soon as all amendments have been made.
Renters’ Rights Invoice
Our newest Property Sentiment Index confirmed a small proportion of the UK public know loads or a good quantity (30%) concerning the Renters’ Rights Invoice, regardless of 48% of these surveyed at the moment renting the house they stay in.
The invoice intends to enhance the present non-public rental system, giving renters extra safety and stability. Key elements embrace:
- Eradicating landlords’ potential to evict a tenant with out cause.
- Give tenants a strengthened proper to having pets within the property.
- Apply the First rate Houses Normal to the non-public rented sector.
- Make it unlawful for landlords to discriminate in opposition to potential tenants resulting from elements like having youngsters.
- Guarantee landlords don’t enhance rents above the extent of inflation.
Whereas renters might welcome the elevated protections, landlords warn that stricter laws and hire controls might discourage funding within the sector. Some have already indicated plans to exit the market, which might scale back rental provide and put upward strain on rents.
Conclusion
One 12 months on, Labour has made housing a transparent coverage precedence—backed by vital monetary commitments and impressive laws. Public and business responses stay divided, and it stays to be seen whether or not Labour can meet its goal of 1.5 million new properties by 2029.
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