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Shares in Housing Developers Up After Labour Win

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    How Has the Property Market Reacted to the New Government?

    Labour’s landslide victory put an end to election uncertainty, and now those in the property industry are closely watching how markets react to this result.

    The party has been back in power for the first time since 2010, and during their election campaign, they pledged to focus on the lack of housing supply, promising to build 1.5 million homes over the next parliament. They also said they will reform the currently convoluted planning system.

    In promising news for the property investment sector, the share prices of UK housebuilders jumped on Friday following the result announcement, according to the BBC. Vistry, Persimmon, Taylor Wimpey, Barratt and Berkeley all finished the day between 2-3% higher, likely due to Labour’s high home-building targets.

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    What Are Labour’s Policies for the Housing Market?

    According to Labour, planning reform is one of their top priorities for stimulating growth in the housing sector and the economy.

    Chancellor Rachel Reeves said: “We need to change how our planning system works speed it up, stop the bureaucracies that are tying up investments in red tape”.

    When it comes to development, Labour has committed itself to a brownfield-first approach but is open to strategically reassessing greenbelt land while protecting “genuine nature spots.” This includes “grey belt” land, a new designation consisting of “low-quality” land. In the past, Labour also put forward the idea of a “planning passport” for fast-track approval on urban brownfield land, commonly used for new residential property developments.

    These policies, along with new house-building targets, have been received well on the market, raising the share price of property developers after the Labour win was announced.

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      What Does the Market Look Like Currently?

      So what sort of housing market have Labour inherited?

      While last year was characterised as a challenging market for the property sector, 2024 has got off to a strong start, and many experts have forecast that it is well on its way to recovery. According to Halifax’s latest House Price Index, the biggest challenge facing homebuyers is the currently elevated mortgage rates. The Bank of England started raising the base rate in late 2021, and it now stands at 5.25%, the highest level in 16 years. A recent BBC article, however, reports that the Bank “appeared to hint” that it could cut rates at its next meeting on 1 August.

      The Halifax House Price Index revealed that UK property prices are up 1.6% from a year ago. This is the seventh consecutive annual increase, showing a return to steady growth. The strongest performing regional market was the North West, with house prices up 3.8% year on year. This area is also one of the most affordable, making buy-to-let in Liverpool and other North West cities increasingly attractive.

      It is no surprise that Shares in Housing Developers Up After Labour the Victory

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      Jessica Ferris

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      Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.