What the Labour Win Could Mean for the Property Market

Winning Vote

New Prime Minister Sir Keir Starmer has been voted into Downing Street and has announced several new policies that could affect homeowners, first-time buyers and landlords. Labour received a majority vote in the most recent general election, they have come to power when interest rates are high, and there is a slowdown in house price growth and property sales.

Delivering his first speech outside Downing Street, Sir Keir stated there is an urgent need for more affordable homes. Some hope that the slowing inflation will encourage the Bank of England to reduce interest rates and help lower the cost of loaning money in the near future. However, there may need to be help from the government when it comes to issues such as a lack of property supply and affording a deposit.

Stamp Duty Changes

Even though it may be easier to get a low-deposit mortgage, more first-time buyers may end up paying stamp duty on their property. Labour has said it will bring down the first-time buyer stamp duty threshold from £425,000 to £300,000. The threshold had been increased by the Tory Party in 2022 and was due to be reduced in April 2025. The Conservative manifesto stated it will make the change permanent but Labour confirmed that the reduction will continue as planned.

This may mean more first-time buyers will pay stamp duty, especially around the South of England and London where average housing prices are above £300,000. Labour intends to increase the stamp duty rate when non-UK residents purchase residential property by 1%.

The Rental Market

Legislation known as the Renters Reform Bill was going through parliament before the general election, with plans to remove section 21 notices, known as ‘no-fault’ evictions. The notices let landlords evict tenants without having to give a reason. Labour’s manifesto said it would “immediately abolish Section 21 ‘no fault’ evictions, to help prevent private renters being exploited” This will make renters feel more secure and will be willing to pay for rental property as there is no risk of them being kicked out for no reason. 

Additionally, Labour has stated to not raise income tax, National Insurance, VAT or the headline rate of corporation tax. While a new government is now certain, a lot of information is still unknown about how much of Labour’s manifesto they will be able to implement, and how quickly it will happen. 

The property market can also take comfort in the resilience it holds, having gone through changing governments and policies plenty of times.