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What The General Election Means For Property Investment

July 5, 2024

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Key Highlights

  • 1.5 million new homes
  • Stamp Duty exemption reduced for first time buyers
  • Mortgage rates kept low for homebuyers
  • Increase on Stamp Duty tax for foreign investment

Today, it was announced that the Labour Party had won by a landslide in the 2024 general election, securing over 400 seats in parliament – their largest majority in some 200 years. The party is set to assume control after 14 years of Conservative rule in the coming days.

Party leader, Keir Starmer, promises to turn back the tide on a number of policies set by the Conservatives. It begs the question, “What does this mean for property investment?”

The party’s first Budget likely won’t be unveiled until much later in the year and currently, it is largely unclear what will actually happen in practice when it comes to real estate and property investment. Currently, the market has experienced a slight pause while investors have eagerly awaited the outcome of the general election before making any purchasing decisions.

However, we can look at what has been previously said and what has been set out in the party’s manifesto. Overall, the party has announced that they are committed to building 1.5 million new homes and slashing interest rates. The government is set to deliver these goals by enforcing economic stability through strong fiscal rules and economic institutions, as well as a fiscal lock to prevent disasters such as Liz Truss’ mini-budget that sent the UK economy into a spiral.

The key takeaway for investors with this government is that there is a lot of opportunity for growth and private developments to help the government with its pledge for over a million new homes in the next five years. This is no easy feat without private help, suggesting that there is still a lot of potential for property investment in the coming years.

As with any new government, it will often take a few months or so for real changes to be made, particularly as the government will have its immediate sights set elsewhere. This means that before any permanent changes are made to the real estate and property development world, there is still time to cash in and secure deals.


What Does A New Labour Government Mean For Real Estate?


House Prices

House prices are currently at an all-time high, pricing homebuyers and first-time investors out of a lot of options. It also has an impact on rental yields, with higher mortgages and house prices reducing the amount of cash flow an investor may get each month.

Managing the cost of houses and, indeed, mortgages is one of the key topics covered in the party’s manifesto. However, at present it is not overly clear how they intend to tackle it beyond controlling inflation.


Property Developments

As it stands, the new Labour government has pledged to build 1.5 million more homes to meet the demands of the country’s rapidly growing population, which is close to eclipsing 70 million.

This drive for new homes is set to be an attractive prospect for investors and will directly impact the property and housing sector. Investors are keen on more home building, with the hopes that the government will heavily leverage private investment to increase capital and deliver the government’s quotas and housing goals. 

It has been predicted by Hargreaves Lansdown – a leading UK financial services – that house-building stocks may see a significant boost due to Labour’s pledge to build new and affordable homes at scale.

In order to meet the quota of 1.5 million homes, the new government will also have to enable faster planning processes and more approvals on homes. This spells good news for property developers, who can get caught up in red tape and development hell for some time before plans are approved.


Mortgage Rates

Labour has promised to keep mortgage rates low for homebuyers specifically, although it has not yet been ascertained how this will work in practice and if it affects first-time buyers looking for buy-to-let residences.

The government is set to reduce inflation and cut interest rates, which will naturally affect mortgage rates. This could see a significant increase in people buying and selling homes across the UK.

Over the past month, mortgage rates have been at a standstill, presumably as the UK awaited the outcome of the election. Overall, they have reduced by a small percentage, though this is expected to drop much further as plans are put into motion.


Stamp Duty

Another interesting manifesto pledge from the new government includes changes and exemptions to Stamp Duty. The party announced that they wish to help first-time buyers, reducing Stamp Duty exemption to £300,000 at the start of the next fiscal year in April 2025. This is a significant lowering from the current £425,000.

Stamp Duty relief comes as a welcome change to first-time buyers and those who are purchasing their first buy-to-let property. However, different rules apply to investors, particularly foreign investors looking to purchase property in the UK.

Currently, the Stamp Duty tax is high on purchases of residential property by non-UK residents. As part of their manifesto, there are plans to increase this rate by 1%. In a statement from Chestertons, a London real estate agent, it is predicted that this won’t have too much impact on the London property market, however.


Freedom to Buy Scheme

The government has also promised a Freedom to Buy scheme. The scheme was developed to aid families that have struggled under rising mortgage rates. It is slated to help 65,000 young people get on the property ladder and is expected to be a permanent move from the government.

The scheme will work as a mortgage guarantee scheme. While this might not directly benefit investors, it still suggests that with this scheme still a long way to go, there will still be a current strong demand for rental properties as young people save and invest their money into the scheme before they are able to secure a property.



North Property Group is a UK-based property investment agency and lettings agency. With a specialisation in new build and off-plan property, NPG is committed to providing renters and investors with premium residences. We secure deals with top developers, often securing high-class homes with below-market prices. We also provide topical advice and can guide you on your investment journey and help you navigate new laws and regulations.In addition to securing the best off-plan property deals on the market, we also offer a comprehensive, end-to-end lettings management service. We can onboard lettings management and tenancies, providing peace of mind and a hands-off approach for investors. Book a free consultation with us today to find out what we can do for you.

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