With Labour securing a majority in parliament, the housing market braces for potential changes outlined in their manifesto. These proposals have the potential to reshape property dynamics across the UK, affecting homeowners, buyers, and investors alike.
Stamp Duty and Overseas Buyers
Labour plans to increase stamp duty by an additional 1% for non-UK residents purchasing residential property. This move aims to reduce foreign investment in the housing market and level the playing field for domestic buyers.
Non-Dom Status and Taxation
The party intends to abolish the non-dom status, which allows individuals to avoid paying UK taxes on foreign income. This change could lead to increased tax revenues while potentially altering the attractiveness of the UK for wealthy international residents.
Offshore Trusts and Inheritance Tax
Labour proposes to end the use of offshore trusts to avoid inheritance tax, ensuring all residents in the UK pay their due taxes. This could impact estate planning strategies and financial decisions for high-net-worth individuals.
Education and Property Prices
Plans to remove VAT exemptions and business rates relief for private schools may indirectly influence the housing market. Higher private education costs could drive demand for properties near top-performing state schools, potentially increasing house prices in these areas.
New Home Construction and Planning Reform
Labour aims to build 1.5 million homes over the next parliamentary term, including new towns and large-scale urban extensions. This ambitious housing strategy aims to alleviate shortages but hinges on successful planning reforms and sustained funding.
Support for First-Time Buyers
The manifesto includes proposals to prioritize first-time buyers in new housing developments and establish a permanent mortgage guarantee scheme. While intended to support aspiring homeowners, these initiatives must carefully balance affordability with potential impacts on property prices.
Private Rented Sector and Buy-to-Let
Labour plans to overhaul regulations in the private rented sector, including abolishing Section 21 ‘no fault’ evictions and empowering renters to challenge rent increases. These reforms aim to enhance tenant rights but could reshape dynamics in the buy-to-let market.
Market Sentiment and Outlook
Labour’s majority government provides stability and certainty to the housing market, potentially stimulating activity and investment. However, the successful implementation of these policies will be crucial, with their effects likely to unfold gradually over the coming years.
