Well, the general election is over! Without making a party-political point, the conclusion of the election and the scale of the new government’s majority gives a backdrop of certainty and stability that the housing market has been lacking for some while – and that’s a good thing.
Confidence is key
It’s not over-stating matters to say that, even with a Labour win on the cards for some time, the general election has slowed the market. The housing market data from Propertymark’s agents and analysts at property portals and elsewhere show that’s been the case.
Therefore, it’s likely that once the summer holidays are over, there could be a real surge of activity amongst buyers and sellers alike.
The prospect of a busy autumn is boosted by the expectation of good news on the interest rate front. The Bank of England meets on August 1 and September 19. There’s almost unanimous agreement amongst financial analysts that at least one of these meetings will trigger an interest rate cut. And most expect a second cut before Christmas.
Even for buyers and sellers not relying on mortgages to fuel their transactions, a rate cut creates additional confidence in the market: which benefits everyone.
Announcements thick and fast
The King’s Speech, at which the government sets out its programme, is on July 17. But
there were numerous signs from Sir Kier Starmer during the general election campaign that he wants to hit the ground running, on housing as much as anything. We may hear plenty of announcements before that date.
These are unlikely to trouble the housing market but will show a government that wants to be seen to be taking action.
One of the very first announcements could very well be the promised extension of the mortgage guarantee scheme to boost first-time buyers. It means more will be able to get on the property ladder with a 5% deposit.
I also expect news on the restoration of house-building targets. Possible deals with private housebuilders to launch new schemes and modernise construction methods. And the recruitment of more planning officers to speed approval for new homes.
These announcements will be made imminently but will take some time to bear fruit. Houses aren’t built overnight, after all. However, there’s one area where the new government can make a difference quickly, and that’s the rental sector.
Rental Reform back on the agenda?
Specialist opinion polls during the campaign confirmed that the substantial majority of tenants, in both the private and social housing sectors, are strong Labour supporters. It’s likely the government will want to ‘deliver’ for them.
Ironically, Labour’s reform plans are strikingly similar to the ones the Conservative government promised but failed to deliver. They restrict eviction powers for landlords, introduce higher standards for rental homes, offer more redress for disputes, and create a mandatory register of landlords.
Put bluntly, these can be delivered quickly and at low cost to the government. So, expect news on this, too, in the very near future.
The long term
With such a big majority the government will have little excuse not to achieve what just about everyone believes is key – building more homes for sale and rent at prices buyers and tenants can afford.
It’s not going to be easy, and the results won’t be clear for a few years. But there is now at the very least a clear direction of travel with the new Prime Minister making it clear he will make tough decisions on the Green Belt and planning reform in order to get more homes.
I have to say one change not mentioned during the campaign, and close to my heart, is making buying and selling easier and quicker. Our system is slower than most countries, and full of frustration and heartache when transactions fall through. The new government hasn’t pledged any move on this issue but it’s sure to be demanded by many.
Meanwhile this summer…
If you’re considering going to the market, now’s the time to act.
After a hectic next few weeks (with Wimbledon, the Euros, the Olympics and the school holidays, as well as a new government settling in!) buyers could be returning in force.
I believe they’ll be feeling more confident than for some time past. So good luck if you’re taking the plunge and good luck to our new policymakers too.
Last Updated: July 5th, 2024
