The Labour Party & Property: Your Questions Answered

It’s all change in the House of Commons, as Labour formally takes control of the country after the State Opening of Parliament. We have been monitoring the party’s property-related announcements in response to an increasing number of clients asking questions about the future.

Here are the answers to the key areas up for discussion.

Q. Who is now in charge of making property decisions?

A. The fate of the property industry will mainly rest with four people. These are: Prime Minister, Sir Keir Starmer; Angela Rayner, Housing Secretary and Deputy Prime Minister; Rachel Reeves, the Chancellor; and Matthew Pennycook, the Minister of State for Housing and Communities. Their remit will cover homebuilding, lettings, stamp duty and buying/selling.

Q. Are more new homes going to be built?

A. That’s the plan. The new Chancellor wasted no time in reaffirming her pledge to get Britain building. The benchmark is for 1.5 million new homes to be built while Labour are in power. A reform of the planning process, local housebuilding targets and the hiring of more planning officers should help achieve this figure, as will the reclassification of some poor quality greenbelt land to ‘greybelt’, to be released for construction.

Q. Is stamp duty changing?

A. Not immediately. So far, the only stamp duty news we’ve had is from a Labour party spokesperson. They confirmed the current, discounted rate of stamp duty for first-time buyers will end at the end of March 2025. From 1^st April next year, first-time buyers will pay stamp duty on any part of their purchase above £300,000 – the current rate is £425,000. There may be additional stamp duty news in Labour’s first Budget – scheduled for mid-to-late autumn.

Q. Will it be easier to get a mortgage under Labour?

A. Potentially. The previous Government introduced a mortgage guarantee scheme, aimed at helping buyers with low-value deposits. This initiative was scheduled to end but Labour have announced they will make it a permanent deal. Rebranded ‘Freedom to Buy’, it will encourage lenders to loan to purchasers with a 5% deposit.

Q. What’s happening to property leases?

A. One of Labour’s most eye-catching claims in the run up to the election was to ban leaseholds within 100 days of coming to power. They did, however, back down on this timeframe before July.

What Labour must do is enforce the Leasehold & Freehold Reform Act, which was passed as law just before the last Parliament was dissolved.

They intend to do this alongside publishing draft legislation on leasehold and commonhold reform, alluding to further changes on the horizon In the past, Labour has previously stated it would ban all new leaseholds – even on flats – which goes one step further than the Conservative party. It’s a case of ‘watch this space’.

Q. Were Section 21 evictions banned instantly?

A. Another headlining-grabbing claim made in the election build-up was the promise to ban so-called ‘no fault’ Section 21 evictions on day one of a Labour Government. Again, this didn’t come true, with the new Housing Secretary admitting it agreed with the Conservatives that court reforms would be required before a ban could take place.

Q. What’s happening with the Renters’ Reform Bill?

A. This Conservative Bill never made it to Royal Assent and a new Labour-created Bill – called the Renters’ Rights Bill – was announced in the King’s Speech on 17^th July. The new Bill, however, has to go through a lengthy consultation and debate process for it to be adopted as an Act. As well as banning Section 21 evictions, the Bill intends to:

• extend Awaab’s Law to the private rental sector
• give tenants new rights to challenge unreasonable rent increases
• ban the practice of tenants bidding against each other to secure a property
• make it easier for renters to keep pets
• extend the Decent Homes Standard to the private rental sector
• introduce a new ombudsman to preside over tenant/landlord disputes
• create a digital database containing information for landlords, tenants and councils
• make it illegal for landlords to discriminate against tenants who receive benefits or have children

With the new Renters’ Rights Bill’s finer details yet to be published, those in lettings may also see:

• mandatory EPC requirements in private rentals rise from E to C
• the value of upfront rent paid by tenants to secure a rental capped
• the notice period landlords give tenants increase from 2 to 4 months
• a compulsory landlords’ register
• a barrier making it more difficult for landlords to switch from long-term rentals to short-term and holiday lets

If you have any questions about how the new Labour Government may influence your next move, please don’t hesitate to give us a call or send an email.