With the UK election now been and gone, and the US election fast approaching, it’s safe to say that political landscapes are in constant flux.
With every election cycle comes a wave of changes that ripple through various sectors, including property and construction. This can often be a source of anxiety, as policies and regulations evolve, potentially impacting market dynamics – but we must not fear political change. We ask Alex, why?
Building and Infrastructure Commitments
Labour’s ambitious building plans are about to shake up the industry. They’re zeroing in on the housing crisis and infrastructure improvements, which means loads of opportunities for the property sector.
Their promise to deliver more affordable homes is a key move in tackling the housing shortage. The aim to build 1.5 million homes in the next parliamentary term could really help a lot of people and, by boosting the supply of affordable housing, we should see a more balanced market, easing the pressure on current rental properties and encouraging fairer rental practices.
Boosting housing stock is great news for many, but it’s still unclear how Labour plans to handle greenbelt land. They seem to be considering a fresh strategy that focuses on grey belt land while sticking to some “Golden Rules” to benefit the community and the environment.
Labour also promises to bring in 300 more planning officers, funded by higher non-residential stamp duty land tax. With around 22,000 planners in the UK, they’re also planning to introduce new ways for “Cross boundary strategic planning” and bring back mandatory housing targets.
People in the Build-to-Rent (BTR) and Private Rented Sector (PRS), as well as the wider residential market, might not notice immediate changes, but it’s clear that sustainability will be a key focus across all sectors under Labour’s new government.
Encouraging Sustainability
Labour’s commitment to sustainability in the UK is set to have a big impact on the property market. They’re putting a spotlight on green construction, energy efficiency, and sustainable practices, aligning the property industry with the wider environmental agenda.
Their focus includes initiatives for green construction and retrofitting old buildings to boost energy efficiency. Developers will be crucial in this transition, making sure eco-friendly upgrades are in place and properties meet new environmental standards.
This not only helps the environment but also cuts energy costs for tenants, making properties more appealing. While we don’t have all the details yet about changes to the Decent Homes Standard or the “Warm Homes” initiative, it’s clear that long-term sustainability is a priority.
As the UK pushes towards its sustainability goals, the demand for eco-friendly properties will rise. Latest research already shows that sustainability is a top priority for tenants across the UK, and this trend is expected to grow.
Developers and property professionals who embrace these changes and adopt sustainable practices will be in a great position to attract eco-conscious tenants and investors, boosting their market competitiveness.
Economic Impact
By driving economic growth, creating jobs, and developing regions, Labour aims to make the property market more vibrant and robust, cutting through red tape, increasing collaboration, and improving access to lending products.
Connecting communities and underserved parts of the UK is definitely on the agenda and has the potential to make less desirable areas more attractive to residents and developers.
Better connectivity and amenities could make areas outside city centres more appealing, boosting property values and expanding the market, especially with plans for a new generation of new towns.
Investing in construction and infrastructure will create numerous jobs, enhancing economic stability.
A thriving economy means more people moving for job opportunities, increasing demand for rental properties and providing developers and landlords with a steady stream of potential tenants.
What the industry needs from the new Government
While the property industry is cautiously optimistic about the new government, they’re urging a focus on long-term stability to accelerate development and properly fund planning departments in cash-strapped local councils.
In the last quarter of 2023, there were less than 70,000 planning applications—the lowest number ever recorded and even less than during the peak of the pandemic.
Justin Young, CEO of the Royal Institution of Chartered Surveyors, emphasised that policymakers need to roll out policies quickly to speed up development and significantly boost resources for planning departments across the country.
He said: “Planning reform is needed to ensure we empower SMEs housebuilders to add additional capacity and expertise. Smaller builders require much more certainty – something the current system does not deliver.”
Angela Rayner, who took over from Michael Gover as Secretary of State for Housing, Communities, and Local Government, commented that Labour’s “New Towns Code” will set a “gold standard target” of 40% affordable homes.
This will include a mix of social and council housing, along with strong design guidelines that blend well with the surrounding areas. Plus, the plan focuses on high-density housing that’s well-connected to town and city centres, and it will ensure residents have access to nature and parks, so she has said.
So, with all this in mind, the property industry really shouldn’t be too worried about political shifts. Sure, there’s a lot of change on the horizon, but it’s not all doom and gloom. Labour’s plans, from boosting affordable housing with their “New Towns Code” to investing in public infrastructure and green construction, are set to shake things up in a good way.
The focus on long-term stability, speedy development, and properly funding planning departments shows they’re serious about making impactful changes. And, while planning applications were at an all-time low recently, Labour’s commitment to a gold standard of 40% affordable homes and improving connectivity should help get things moving again.
Embracing these changes could open up new opportunities and markets, making the property sector more vibrant and competitive.