As the UK general election campaign heats up, the housing market remains a topic of significant interest.
Despite concerns from the industry about the lack of focus on UK property, it is expected that housing market activity will stay stable leading up to the election, based on historical trends. This outlook is reinforced by the current mindset of home-movers, most of whom say the election will not impact their plans.
However, in the long term, the incoming government will need to tackle the ongoing housing supply crisis and other issues. In this week’s blog, we’re exploring how policy changes may impact the various challenges faced in the sector.
The current outlook
When Prime Minister Rishi Sunak called the election on 22 May, the UK was witnessing a widening north-south divide in house price inflation and a subdued spring market. Despite the challenges posed by 16-year high interest rates on mortgage affordability, there is optimism that house prices could exceed expectations in 2024. This positive outlook is partly due to buyers being more pragmatic about property type and size.
The prime market
Buyers in the prime property market are likely preparing for increased taxes, VAT on private school fees and targeted measures for overseas buyers. These changes appear to be anticipated within the market, especially since aggressive wealth tax discussions (like the mansion tax proposals of the early 2010s) have not resurfaced.
Housing delivery and planning
While a change in government may not significantly alter the macro-economic environment, it could shift the focus of housing delivery and planning. Labour, for example, has set an ambitious goal to deliver 1.5 million homes over the next five years – a policy that could gradually transform the housing landscape, although its immediate market impact may be limited.
The rental market
The general election could have a notable impact on the rental market, particularly concerning the Renters Reform Bill. Currently at the Committee Stage in the House of Lords, the bill might struggle to pass before Parliament is dissolved.
Nevertheless, since both major parties support rental reform, the abolition of the Assured Shorthold Tenancy across England and Wales seems inevitable. These tenancies allowed landlords to create fixed-term contracts that could be ended with a Section 21 notice without citing a reason. The bill proposes eliminating Section 21 notices and making all tenancies open-ended.
Targetfollow
At Targetfollow, we recognise the profound impact that market trends and political developments can have on the property market. Our team is dedicated to analysing these factors to make informed decisions and strategically manage our assets.
We pride ourselves on a diverse portfolio that spans residential, commercial and mixed-use properties. By leveraging our deep industry knowledge and extensive experience, we navigate the complexities of the property market, turning potential challenges into opportunities for growth and innovation.
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