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Well the results are in, and Labour have won the victory.
Some believe that a new Labour government might be able to kick start the housing market again given the fact they have won by a strong majority, this might return the confidence to buy or sell property.
If Labour hold true to their promises, a base rate cut will be highly anticipated later this year. This would help reduce the rocketing mortgage rates, which then encourages people to buy and sell their homes. Some lenders have already started changing rates.
Labour have promised to build 1.5 million homes over a period of 5 years, to try and encourage people to jump on the property ladder, and ease the supply and demand. Going hand-in-hand with this is their promise to make the Mortgage Guarantee Scheme a permanent thing, that allows people with lower incomes and young people to have the Government act as a guarantor to help get them started.
They have also stated that first time buyers will be given the first opportunity within new housing developments, before they are offered to any overseas investors – let’s just hope that this is put into action……..
All of the promises together might mean that we will soon witness an increase in house prices.
The average house price in the UK peaked during 2022 at £288901, according to the Land Registry.
Labour have also pledged that they will be introducing VAT on private school fees, this might encourage rises in house prices for those areas. Which we know happens already in areas that have high performing schools.
When Labour were last in power (Tony Blair in 1997 and then Gordon Brown following this) for 13 years, house prices rose by nearly 176% and that was taking into account the crash of 2008 which saw a lot of houses drop by about £50-70K. At this time, however, it was much easier to obtain a mortgage, the lending criteria was easier, and there were a higher amount of interest free lending products available.
In 14 years of Conservative leadership, house prices have risen by 64.7%.
Any interest rate changes are more likely to have a bigger impact on increasing house prices than any of the above pledges that are promised by labour. The higher interest rates are still putting off a lot of people wanting to sell or buy, and we would think it might be later this year before things get moving!
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