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Industry welcomes Labour manifesto but will it deliver on promises? – reaction

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  • 13/06/2024
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Industry welcomes Labour manifesto but will it deliver on promises? – reaction
The proposals laid out in the Labour Party's manifesto have been broadly welcomed by the mortgage and property sector, provided leader Keir Starmer keeps to his promises.

Labour’s manifesto, which was published today, included pledges to reform planning to build more homes, scrap no-fault evictions and make the mortgage guarantee scheme permanent. 

 

Following through with pledges 

Terry Woodley, managing director of development finance at Shawbrook, said it was not the first time promises had been made to increase housing building. 

He said the UK was in “urgent need” of solutions to address the housing shortages, adding: “It’s encouraging to see the Labour party including such reform within their manifesto today, with plans to build on both brownfield sites as well as the ‘grey’ belt. However, promises to boost housebuilding have been heard before.

“The proof will be in the pudding as to whether manifesto pledges from either of the main parties will result in meaningful change for the property market.”

Phil Jenkins, CEO of corporate financial adviser Centrus, said: “Labour’s pledge to deliver the biggest increase in social and affordable housebuilding in a generation provides a welcome statement of ambition in relation to solving the UK’s housing crisis. But this is unlikely to be delivered through planning changes alone, and will require a long-term rent settlement for capacity-constrained housing associations as well as additional public sector subsidy, which is notably absent from Labour’s specified spending pledges. 

“The next government would also be well-served by acknowledging the likely role of institutional capital in solving the crisis, via the growing for-profit affordable housing sector’s efforts in meeting these ambitions.” 

Ryan Etchells, chief commercial officer at Together, said it was a good idea to crack down on ‘nimbyism’, but it would be interesting to see whether any incoming government would be able to support SME housebuilders and bring plans to fruition.”

He said: “It’s great to see all parties emphasising the importance of this, and we look forward to seeing what the new government, whatever that may be, can offer the UK’s housing market.

“While we welcome the promise of partnership with British industry to kick start growth – now is the time for action.” 

John Phillips, CEO of Spicerhaart and Just Mortgages, said there were few surprises in Labour’s manifesto, but said it would be interesting to see how they reformed planning to ramp up housebuilding. 

Phillips said: “While Labour appears committed to improving supply, there appear to be few practical steps to help first-time buyers get on the property ladder. Compared to the Conservatives’ reintroduction of the Help to Buy scheme or their pledge to abolish stamp duty, there seem to be few stimulants for affordability. 

“Labour’s clear housing focus is on renters and supply, but questions remain about affordability and whether or not these pledges can stem the bleeding in the spluttering housing sector.” 

 

Labour manifesto picking up where the Tories left off 

It was noted that some proposals in Labour’s manifesto were similar to pledges made by the Conservative Party, such as the reforms to leasehold.

In its proposals, the Labour Party said it would make commonhold the default tenure for new housing. 

Linz Darlington, managing director of lease extension specialist Homehold, said: “Labour’s manifesto promise on leasehold reform outguns that of the Tories – promising more comprehensive and far-reaching reforms of the tenure. 

“It isn’t surprising that Labour has promised a more comprehensive reform of leasehold than the Conservative Party. As the opposition throughout the legislative process for the recent Leasehold and Freehold Reform Act 2024, Labour consistently pushed to further the benefit of the reform to leaseholders than the Conservatives would allow. 

“However, it must not be forgotten that it was only April this year that Labour U-turned on their previous promise to abolish leasehold in their first 100 days in office.” 

Darlington said leaseholders needed to see “prompt progress”, as many were concerned that Labour would prioritise other issues, such as renters reform.

He added: “As valuable as such reforms are, they could leave leaseholders out in the cold. 

“The first thing any government needs to do is to make sure that the recently passed Leasehold and Freehold Reform Act is implemented quickly and effectively. Provisions that are uncontentious and do not need further consultation should be implemented first, so leaseholders can start to benefit from them. 

“They must then turn to the more complex and contentious elements of the 2024 act. These will require secondary legislation and possibly further consultation before they can come into force.” 

Darlington said it would be positive to see a more comprehensive version of the Leasehold Reform Bill, with a phasing-out of ground rents for existing leaseholders, ending forfeiture and making commonhold a mandatory alternative for new flats. 

Katie Pender, managing director of Target, said Labour’s plan to build one-and-a-half million homes and prioritise brownfield sites for development was “almost identical to those in the Conservative manifesto”, except for the commitment to bring back mandatory housing targets for local authorities. 

In the Conservative Party’s manifesto, it promised to deliver 1.6 million homes. 

However, Pender said: “Every government in recent times has promised to build more homes and reform the planning system. Since 2019 at least, housebuilding targets have been missed. 

“Meanwhile, first-time buyers are facing the toughest conditions seen in 70 years. Labour’s manifesto proposals do seem to offer this group some reasons for hope.” 

She said the plan to give first-time buyers first pick for local homes and make the mortgage guarantee scheme would instil confidence, but added that the housing market urgently needed a “genuine and fundamental overhaul”. 

“The question is whether Labour’s changes go far enough or if this manifesto is playing it too safe,” Pender added. 

Danny Belton, head of lending at Mortgage Advice Bureau (MAB), said both main parties were looking to improve access to housing for more first-time buyers, “but there are many other factors at play that will come together to make homeownership a reality for more people in the coming years, from innovation in the mortgage market to the supply of homes”. 

He added: “As with all policy pledges, there can sometimes be a detour from what’s promised to what’s actioned. The devil really is in the detail and that’s what we’ll find out after 4 July.” 

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