Housing market could see post-election boost

Labour winning by a landslide could be good news for the housing market post-election, especially as the result went as expected.

That’s according to Paresh Raja, chief executive of specialist lender Market Financial Solutions, who commented that this election was unusual, given there was little uncertainty on which party was going to win throughout the campaign.

Raja said:

“The accepted logic is that elections bring uncertainty and are therefore bad news for the property market.

“But there have been some important differences this time around: Rishi Sunak called for the vote to take place a lot earlier than expected, and the result (a Labour victory) has seemed highly likely from the off.

“As a result, there has been less uncertainty than there could have been, and now the ballots have closed, we should see a prompt return to more stable, ‘business as usual’ conditions.

“There are enough signs to suggest the market is ready for a post-election uptick in activity.

“The number of homes coming onto the market in the first half of 2024 is 22.9% higher than last year, while economists are still predicting that the Bank of England will cut the base rate twice before the end of the year, with the first potentially coming on 1st August.

“But, despite these reasons for optimism, there is clearly no room for complacency.

“Political and economic turbulence remains, so lenders have to focus on supporting brokers and borrowers as best they can.

“Optionality and flexibility will be key in the second half of this year, and lenders have to commit to providing borrowers with the financial products they need to both benefit from any opportunities that a potentially more stable climate could provide.”

Matt Harrison, sales director at finova Payment Services, reckoned the Labour victory could lower borrowing costs, which would stimulate the housing market.

Harrison said:

“If handled right, Labour’s landslide victory could boost lender confidence in the housing market.

“Their manifesto promises significant investments in housing and measures to increase supply, which could lower borrowing costs and create a more stable market.

“But it’s no secret that new governments have consistently fallen short on housing pledges, and Labour’s proposed mortgage guarantee is estimated to help only 5% of first-time buyers annually.

“It will be interesting to see if they can deliver on these plans to revive the spluttering housing market.”

Jatin Ondhia, chief executive of Shojin, the investing platform, said it was now time for Labour to back up its words with action, when it comes to stimulating property development, not just domestically, but globally.

Ondhia said:

“Ensuring the UK continues to remain a global hub for investment needs to be a key priority, and the real estate sector will remain a crucial market for attracting that inbound investment

“Labour has work to do: interest rates remain high, the cost-of-living crisis has left a toll on people’s spending power, and economic growth needs to turbo-charging.

“However, following a rather tumultuous end to the Conservatives’ 14 years in power, the UK now has a chance to reposition itself, building strong international partnerships and attracting global investments.

“Labour’s plans to reform the planning system and pave the way for affordable house building present significant opportunities for greater investment into property development, but the effective implementation of their promised reforms will be key.”

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