The General Election result: Comments from LRG directors

July 5, 2024 PR Officer

Allison Thompson, National Lettings Managing Director, Leaders Romans Group said:

Labour’s victory in the general election marks a significant turning point for the private rented sector (PRS). With their ambitious plans for housing reform, it is crucial that the new government addresses the pressing issues facing both landlords and tenants.

“Firstly, fiscal reform must be a priority. The current tax regime has already driven too many landlords out of the PRS due to increased taxes and additional regulations. Property lets are the only businesses in the UK that do not have taxes offset. To ensure a stable and thriving rental market, taxation must be reassessed to level the playing field.

“Secondly, the role of the PRS in addressing homelessness cannot be overstated. With a growing deficit in affordable homes, the PRS is pivotal in providing homes for those in need. Labour must shift its focus from penalising rogue landlords to supporting and encouraging fair and honest landlords who contribute positively to the housing sector.

“Energy efficiency demands are another critical area that requires clarity. Landlords need a realistic and manageable timeframe for implementing energy efficiency improvements, considering the associated costs and rental voids. Clear guidelines and reasonable expectations are essential for the long-term sustainability of the sector.

“The failure to pass the Renters (Reform) Bill was a setback, highlighting the need for comprehensive housing policies that provide stability and address the critical issues in the sector. Labour’s promise of 1.5 million homes over the next parliament is ambitious, and while it is promising to see a focus on housing build programmes, the undersupply in the PRS during this period must also be addressed.

“Finally, clear commitments on Capital Gains Tax (CGT) will provide homeowners with the certainty they need to plan their futures without fear of sudden policy changes.

“We urge the new government to place housing at the heart of its agenda, providing the consistency and long-term focus that the sector desperately needs. The private rented sector is integral to solving the housing crisis, and we look forward to working with Labour to ensure that all aspects of the housing market are effectively addressed.”

Kevin Shaw, National Sales Managing Director at Leaders Romans Group said:

Labour’s landslide election victory this morning came as no surprise and so we don’t anticipate shockwaves in the property market.

Historically sales tended to slow when general elections were called and would pick up soon afterwards.  But there’s little evidence of that: our applicant registration figures have risen quite considerably both on the previous half year and year-on-year.

What we do expect is more certainty in the property market.  We expect anyone who has delayed selling because of the general election to put their property on the market in advance of the summer holiday season and with a view to being established in a new home before Christmas.

Mortgage swap rates are down and we expect the Bank of England to finally reduce interest rates by at least 0.25% on 1 August.  Both factors will provide a significant further boost.

The unknowns are potential changes to Capital Gains Tax and Inheritance Tax which could have a direct bearing on the market. But fears of tax increases should provide an incentive for sales to take place sooner rather than later.

It’s not typical for the property industry to welcome a more left-wing administration, but Keir Starmer’s team has gone to considerable lengths to win business support while also promising not to hike taxes. And so the sentiment here at LRG is a positive one and we look forward to our sales trajectory continuing upwards.

Lawrence Turner, Director of Boyer (part of Leaders Romans Group) said:

With the dawn of a new Labour Government, there appears to be a renewed sense of optimism within the industry that we can take significant steps towards addressing the housing crisis. Labour’s landslide victory provides them with the political capital needed to push through the ambitious housing policies outlined in their manifesto.

One of the key promises made by Labour is the commitment to deliver 1.5 million new homes over the next parliament. This remains an ambitious target, but one that is absolutely necessary if we are to tackle the housing shortage that is pushing up prices and leaving many struggling to afford a home. The Government must make the most of this opportunity to address the crisis and kickstart economic growth.

Labour’s pledge to immediately update the National Planning Policy Framework and invest in local planning authorities is a promising sign that they are serious about supporting and enabling sustainable development. A properly funded and resourced planning system is crucial in ensuring that new homes are delivered efficiently and in the right locations. We urge the Government to follow through on their commitment to recruit additional planning officers and provide the support needed to local authorities.

The focus on brownfield sites and the fast-tracking of planning permission for such developments is supported. Brownfield sites should be a priority to address the housing crisis and provide opportunities to maximise previously development land that is often well-served by public transport and infrastructure. It will be important for the Government to publish more details on how they plan to implement this policy effectively.

The review of the Green Belt has always been a politically contentious issue, but one that must be tackled if we are to build the homes we need in the most sustainable locations. Releasing land from the Green Belt for new homes in locations near to employment centres and transport hubs is crucial in ensuring that our cities remain vibrant and economically viable.

The proposal for the creation of new towns is also a welcome pledge, but it is important to acknowledge that these developments will take many years to materialise. In the meantime, the new Government must focus on delivering the short-term measures set out in their manifesto, including planning reforms and measures to reduce uncertainty for the development industry; and proper support and resourcing for local authorities to get local plans in place and determine planning applications.

We are hopeful that the new Labour Government will take bold and decisive action to tackle the housing crisis.

Robert Poole, Director at Glide Property Management part of Leaders Romans Group said:

“As we welcome the new Labour government, it is crucial to acknowledge the strides made and the challenges that lie ahead in the property management sector. The recent laws have alleviated some of the burdens on leaseholders, particularly with cladding issues post-Grenfell. However, the process of developer-funded remediation for mid- and high-rise buildings remains problematic. Despite the commitment of developers, the timeline for remediation is fraught with delays, impacting over 12,000 high-rise blocks across the UK. The new government must ensure that developers adhere to set timescales to prevent indefinite delays and ensure the safety of residents.

“Developers often approach these remediation projects under public and shareholder pressure, which can lead to either rushed deadlines or cost-cutting measures that compromise safety. It is imperative that we avoid another race to the bottom, particularly in critical areas like fire safety.

“Labour’s manifesto commitments to leasehold reform, such as capping ground rents and gradually reducing them to a peppercorn, raise significant concerns. While intended to protect leaseholders, these measures could lead to unintended consequences, including increased costs for property management and a potential decline in the quality of service provided to residents. The focus should instead be on ensuring fair practices and reasonable costs without undermining the viability of property management services. We strongly urge the new Government to swiftly introduce regulations for Managing Agents to eliminate those who cut corners in their services to leaseholders, thereby improving standards and professionalism.

“As these reforms progress, it is essential that a balanced approach is taken. Consultation with practitioners, leaseholders, and freeholders is necessary to ensure that changes are both fair and practical, addressing the needs of all stakeholders without compromising the integrity of the property management system.”

Ian Barnett, National Land Director, Leaders Romans Group (LRG) said:

The size of Labour’s majority suggests that rather than one term of a Labour administration ahead of us, we may have more.

There is a huge amount that can be achieved in that time, to introduce genuine planning reform and perhaps even resolve the housing crisis to the benefit of everyone.

My understanding is that Labour plans to hit the ground running, with a ministerial statement on the NPPF ready to be issued as early as next week.  This would probably revert to the pre-December 2023 NPPF – reinstating housing targets, putting the 5 year land supply in place for all local authorities irrespective of the status of their local plan status, and increasing the requirement for all local authorities to have a current plan.

More significant planning reform is likely to follow. I am enthusiastic that an element of regional strategic planning will be reintroduced, as it was it was by the last Labour administration. Taking local politics out of planning would significantly speed up the process, allowing many more homes to be built; it’s exactly what we need after years of uncertainty, indecision and contradictory policies.

Because Labour is so committed to increasing housing delivery I anticipate an increased number of successful appeals in the early days of the new administration. Then, as new politics are successfully introduced we will see an increase in plan-led development and a gradual reduction in those which have to go through the appeals system.

While so much of this is positive, the new Labour government must think very carefully before introducing changes in taxation. From Capital Gains Tax to land value capture, increased taxes risk stunting potential growth – and a government so intent on increasing housing supply could be seen to be shooting itself in the foot.

With that one caveat, I believe that the new government with its strong commitment to increasing housing delivery is good news for those in need of a suitable home, for those of us in the planning and land industries who have been crying out for a more rational approach to planning, and for the wider economy too.