Sir Kier Starmer said the UK was waking up this morning to “the sunlight of hope”, which was “shining once again on a country with the opportunity after 14 years to get its future back”.
This shift in power will be of interest to Richardsons' clients as many have investments in the UK as well as in Gibraltar. In addition, Labour's manifesto included commitments to address the frontier treaty and defend Gibraltar's right to self-determination and sovereignty. Many feel the previous government were largely playing damage-limitation in the final months, protecting votes and therefore putting Gibraltar (where there are no votes to lose) a long way down the pecking order.
So how has the UK property market reacted to the landslide victory?
Industry reaction:
Nathan Emerson, CEO of Propertymark (NAEA), commented:
“Propertymark welcomes wide-ranging engagement with the new Labour Government to help steer an objective pathway forward for the housing sector. We have seen a chronic undersupply of affordable new housing for many years.
“Sustainable housing is the foundation for any strong economy and there must be clear and well thought out plans that inspire investment and improve supply moving forwards. We want to see long-term cross-party cooperation that delivers the right kind of homes in areas they are desperately needed.”
Winkworth’s Chief Executive Dominic Agace commented:
“With a new Labour government with a strong majority, it looks like we will have political certainty, putting the instability of the past ten years behind us and raising the profile of the UK amongst our international peers once more. A lack of stability has deeply affected the property sector. Now, coupled with the increasingly positive news on the UK prospects and with interest rate cuts pending, this should encourage a new upbeat mood in the property market. Therefore, I think it’s really important that the new Government stays true to the centrist stance on which it was elected.
” I look forward to a steady, consistent and business-friendly approach to the economy without unfunded spending, so we can finally address the biggest issue of the day. High interest rates are hurting home buyers, preventing first time buyers getting on the ladder and preventing investment in new homes.
“I believe it’s essential that the new government, in its desire to show progress, that it does consider its new policies carefully, rather than rush them through – to avoid unintended consequences.
“I welcome their investment into planning departments and quicker release of development sites to help meet housing demands.
“I don’t want them to rush into intervening in the private rental market without considering that supply of properties to rent, particularly in the cities is the fundamental issue. We are currently short of 120,000 rental properties to meet current demand. Banning Section 21 without adequate resources in the court system to allow landlords to exit anti social tenants will lead to a sell off. This also applies to rent controls where mechanisms need to be well thought through. Without growth in rents aligning with inflation over the long term, institutional investment will not be made in the sector. This is much needed to create enough new homes for a growing number of tenants of all ages.”
Nigel Bishop of Recoco Property Search, said:
“Labour’s manifesto pledged to improve the UK’s housing market and the party will be under immense pressure to deliver. One promise was to build 1.5 million homes and we are interested to learn more about Labour’s plans to utilise “poor quality” green belt areas as this will likely be met by protests from some local residents and organisations.
“Labour’s pledge to levy VAT on school fees has been labelled one of the party’s more controversial ones. This will leave many parents unable to afford private school education and inevitably impact on the property market by boosting demand for properties in close proximity to good state schools. Properties in these catchment areas can already ask a 20% premium and a politically-caused boost in demand for such homes will create an even more competitive market for buyers.
“In the run-up to the general election we already saw house hunters, who previously paused their activity to observe the political development, resume their search. Now that a party has been elected and economists predict a likely interest rate cut over the coming months, we expect further buyers to follow suit. ”
Jo Davis, Principal and UK Executive Chair, Avison Young, said:
“The proposed Planning Reform aims to kickstart housebuilding with the Housing Recovery plan, promising a swift implementation. Balancing residential growth in urban brownfield and grey belt areas whilst creating quality and resilience places with industrial and economic needs is crucial. Last-mile logistics are increasingly vital, yet industrial projects often lose out to housing in urban fringes. Strategic planning is essential, integrating housing with necessary infrastructure like retail, logistics, health and overriding requirement for power to meet modern consumer demands effectively.
“Transport infrastructure is pivotal for supporting growth, but planning delays and power supply challenges hinder industrial development. These delays impact local economies and job creation, underscoring the need for streamlined processes and improved energy strategies, such as enhancing solar use on industrial rooftops, wind farms. Addressing these challenges is vital to ensuring sustainable, balanced development under the new Planning Reform agenda.”
Robin Rathore, CEO, Bamboo Auctions, comment:
“While we were certain about a Labour election victory, we’ve been fairly uncertain about how they will help solve some of the systemic problems in the housing and property market, so the first 100 days of government will be crucial in setting out how serious Labour is about change and progress in the sector.
“We know that Labour want to build 1.5m new homes, we know they are committed to removing no fault evictions and we know that Labour will let the 0% SDLT threshold for first time buyers fall back to £300k from £425k.
“Whether you agree with these policies or not, at least the property sector now has clarity of vision and certainty of direction for the country for at least the next five years. This will create more stability, more confidence and ultimately more liquidity in the property market. At Bamboo, we’re looking forward to helping our agent partners take advantage of improving market conditions with our technology and customer success.”
Nick Walkley, principal and UK president, Avison Young, added:
“Labour’s housing delivery plan sets out bold targets: 1.5 million new homes, with a focus on 90,000 affordable or social housing units each year. To get land ready for building and boost affordable housing, Labour needs a revamped approach to capturing land value. This calls for collaboration among local authorities and stakeholders.
“Big housing projects take time, even when everyone’s on board. Labour wants to speed things up by streamlining how funding is approved, especially by involving private companies. They also plan to make compulsory purchase orders quicker and easier, so they can start building sooner. It’s a balancing act: Labour wants to solve the housing crisis fast, but large projects come with delays.”
Time will tell what effect this new ever-powerful commons majority will have on interest rates or Gibraltar as a whole, but you can ensure we'll keep you updated at Richardsons HQ.
