Written by: Mobeen Akram - New Homes Director
Following Labour’s winning majority during the July 2024 general election, Prime Minister Keir Starmer has announced a swathe of policy changes and ministerial appointments. The key goal of all departments, according to Chancellor Rachel Reeves, is creating economic growth.
Government appointments for housing
Starmer has appointed Deputy Prime Minister Angela Rayner as Secretary of State for Housing, Communities, and Local Government. The department was previously known as ‘Department for Levelling Up, Housing and Communities’. Rayner announced the renaming on Twitter (now ‘X’), saying ‘A government of public service means fixing the fundamentals to deliver for the British people. No more gimmicks and slogans, but the hard yards of governing in the national interest.’1
As well as the appointment of Angela Rayner, the new PM also announced the appointment of housing ministers Matthew Pennycook and Jim McMahon. Alongside these announcements, Rachel Reeves was announced as Chancellor of the Exchequer, and Ed Miliband was announced as Secretary of State for Energy Security and Net Zero.
Reeves, Rayner, and Miliband all stated in their opening speeches that they would be working together closely to ensure all their work lends itself to tackling the housing crisis and creating economic growth in the UK.
Furthermore, In the King’s Speech 2024, 39 new bills were outlined that ministers aim to pass in the next parliamentary session. A version of some of these were originally tabled by the Conservaties but not passed before the election.
New planning changes
The biggest change to be expected in the housing industry is the outlined ‘ripping up’ of the planning system in the UK to allow more houses to be built on unused land, and to “unblock key ‘stalled sites,’” starting with areas in Liverpool, Worcester, and Sutton Coldfield to ‘unlock’ over 14,000 new homes.2
Rachel Reeves praised the Deputy PM for her commitment to maintain the economic benefits of development when negotiating changes to the planning system. As part of this, a new Planning and Infrastructure Bill will be introduced to streamline the process for approving important infrastructure.
To ensure this new approach is adopted throughout the UK, the Deputy PM will be writing to the Office for Investment and local mayors across the country to reiterate that any ‘important planning considerations’2 with a significant investment opportunity be brought across her desk, and the Chancellor’s.
"To keep up with the additional conversations and decisions around the planning system, Rachel Reeves has promised an additional 300 planning officers over the UK. It is expected that further announcements will be made in the upcoming months, with the goal of boosting the development of infrastructure and housing. These announcements will include an update on the National Planning Policy Framework to now include mandatory housing targets as well as a review of the boundaries of green belt land to ensure these targets are met.
These updates will also prioritise brownfield sites to meet housebuilding targets, and will include a set of ‘golden rules’ to ensure that thousands of affordable homes are available on these developments, on social rent.
Building on brownfield land is all about finding the line between development and sustainability. If you're interested in sustainable living, check out the article below:
Housing goals
In the King’s Speech 20243, the Labour government announced their plans for Housing, Communities, and Local Government.
Part of this included a draft Leasehold and Commonhold Reform Bill to help curb ground rent charges and a forfeiture ban, which can happen where leaseholders could loose their home over small unpaid debts.
Housebuilding
As detailed earlier, this government have outlined their commitment to housebuilding by prioritising development of brownfield sites, adopting a strategic approach to assigning and releasing green belt land, and reforming ‘compulsory purchase compensation rules’ to hasten ‘site delivery, and deliver housing, infrastructure, amenity, and transport benefits in the public interest’.
New towns and affordability
As written in their manifesto, Labour have also committed to building a series of ‘new towns’ - inspired by Clement Atlee’s Labour introducing the ‘New Towns Act’ after World War II4. By establishing these ‘new towns,’ Labour hope to build their 1.5m new homes. In addition to this, they also committed to introducing a new, permanent expansion of the mortgage guarantee scheme called ‘Freedom to Buy.’
Private rented sector
A Renters’ Rights Bill will be introduced to ban no-fault evictions and help support building safety rules for both social and private tenants.
Labour is committed to reforming the private rented sector and will abolish section 21 (no-fault) evictions immediately, and empowering private renters to challenge private landlords raising rents unreasonably.
There may also be conversations later down the line about minimum EPC requirements, but nothing is set in stone just yet.
Read more about the last policies we had, which were overturned:
Stats and impact
With housebuilding a priority, share prices of UK housebuilders went up following the election5. Vistry, Persimmon, Taylor Wimpey, Barratt, and Berkeley were among the housebuilders that ended the day up (between 2-3% higher) off the back of Labour’s plans to build new homes.
Additionally, despite a substantial shift in the UK landscape, house prices have remained stable, according to data from Halifax6. We may also see mortgage rates cuts by the end of 2024 as a potential result of Labour’s win, according to some in the industry.7
A new party and your mortgage
Realistically, we know Labour are facing an uphill battle and have a lot to fix before they can make any great strides in their manifesto. That being said, we’re eager to see how these developments in the housing and mortgage landscape play out.
More homes for more people is a sentiment we can all support and if affordability improves alongside this goal, then all the better for it.
If you’re unsure how Labour’s win may affect your mortgage, speak to your adviser. Whether you’re buying for the first time or looking to remortgage, they can help you decide what to do and outline your options for you.
Get in touch with one of our expert advisers today to find out more.
Important information
Your home may be repossessed if you do not keep up repayments on your mortgage.
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Frequently asked questions
The new government is planning on overhauling the existing planning system to speed up the building process for their 1.5m home target. This aims to alleviate the pressure from the housing crisis.
Although other factors also play a role, the need for new housing develops when population increase results in the formation of new households8. People who are currently living in inappropriate housing have a backlog of needs, and financial constraints may make it difficult for them to get the housing they require.
The main reason there’s a housing crisis is because not enough new homes are being built to support the UK’s growing population. This has happened partially due to a lack of funding, planning backlogs, and tricky policies.
The party plans to abolish Section 219, improve standards for privately rented homes and help the country meet minimum energy efficiency standards.
Labour plans to offer a permanent mortgage guarantee scheme under the name “Freedom to Buy.” This means the government will essentially act as a guarantor for those unable to save big deposits. The scheme, introduced by the Conservatives, was scheduled to end in 2025.
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