by Rosie McLean 
With Labour now in power after their landslide victory in July’s general election, the focus turns from campaigning to implementing their policies and plans for the next five years.
If you are considering selling or are already in the process, you might be wondering what impact the election result will have on the property market and your plans.
Greater economic stability to lead to mortgage rate cuts
High inflation and record interest rates have hampered the housing market for some time, impacting affordability and confidence in moving. The buying market has slowed while the rental market has seen record demand as some buyers have put off purchasing until mortgage rates fall.
But things are changing. Last month, inflation hit the previous government’s 2% target. As a result, interest rate cuts are expected at the next base rate announcement at the beginning of August. Once interest rates begin to fall then more significant mortgage rate reductions should follow.
Mortgage lenders, including First Direct and Halifax, had already started cutting rates in early July in anticipation. As mortgage rates fall then buyer demand and your potential pool of buyers will increase, although that will also mean increased competition with more properties coming to market.
However, there could be more pain. The new government will work hard to maintain the momentum of an improving economy. Another key step for change within its manifesto was the pledge to deliver economic stability by introducing tough spending rules to keep mortgage rates low.
General market stability
As well as economic stability, we should also see improved market stability within the housing market now the general election is done and dusted and uncertainty has ended. It’s now down to Labour to give a clearer idea of their plans to stimulate the housing market and how that could benefit sellers like you.
Changes to planning and increased housebuilding will mean greater availability
One of Labour’s most significant pledges in its manifesto, and one of the first things it has expanded on since coming to power, is its plans to get Britain building again. It has set a target of 1.5 million new houses over the next five years. Delivering her first speech in power, new chancellor Rachel Reeves said the target would be met through widespread planning changes and a review of greenbelt boundaries. The promised reform of planning laws should speed up the delivery of new housing stock to the market and deliver a rebalancing of supply and demand longer-term.
Mortgage help
In another attempt to stimulate the housing market, Labour promised additional mortgage support in its manifesto with its permanent mortgage guarantee scheme, Freedom to Buy. It’s aimed at helping first-time buyers who might be facing challenges in saving for their deposit. However, it also since announced a return of the first-time buyer stamp duty exemption to £300,000 in April 2025 – although it will honour the increased temporary cap of £425000 until then. That could hamper first-time buyer demand for more expensive properties.
