Andrew Schofield, Operations Director at Karl Tatler Estate Agents looks at what impact a Labour Government is likely to have on the Wirral housing market
After 14 years we have a new party leading the country, and whilst the election result was no surprise, what will a Labour majority mean for the local housing market?
Year to date, 2024 has seen activity levels higher than the same period last year. Looking at Rightmove data, Listings are up across the Wirral by around 6% for the first 6 months of the year, with sales activity seeing double digit growth at 11% and agents seeing a growth in the percentage of listings selling, rising from 73% in 2023 to closer to 80% so far this year – however this is a far cry from the post pandemic boom which saw sales outstripping listings at around 115% – on this basis its fair to say that so far this year the market has been one of recovery from the chaos of Liz Truss’ infamous budget, but with reasons to be cautiously optimistic.
In the weeks leading up to the general election, activity levels were, expectedly, lower than this time last year as home owners waited to see what the outcome and impact of the general election might be.
In the aftermath of the election and with the forecast result becoming a reality, it appears that not much has changed in the short term and if anything there is room for longer term optimism.
The property market is the backbone of any strong economy, something which Labour appear to be keen to focus on with the first female chancellor, Rachel Reeves, wasting no time in re-iterating Labours manifesto pledge of building 1.5 million new homes across this parliament. This is a welcome boost to the market which will stimulate activity. Financial markets, great indicators in the confidence of the Governments fiscal policy, reacted positively to the news with share prices in housebuilders such as Persimmon, Barrett and Taylor Wimpey seeing an uplift of between 2-3%.
To deliver these extra homes, reform will be required at national and local level around planning policy and investment in its infrastructure is needed, something the Chancellor promised to do in her speech.
It is also widely predicted that Labour will go further in initiatives to strengthen the market by making their flagship ‘Freedom to Buy’ scheme permanent. This scheme aims to get 80,000 young people on to the housing ladder by incentivising lenders to offer high loan to value mortgages by acting as guarantor for buyers who cant afford larger deposits and although it is predicted that Stamp Duty for first time buyers is likely to be reduced to £300,000 from £425,000, given local house prices, that shouldn’t affect too many first buyers on The Wirral.
The much-anticipated drop in base rates has not yet materialised but all forecasts suggest this is likely towards the end of summer, providing inflation remains around 2%. This will be a further boost as it will lead to lower interest rates on mortgages, another catalyst for activity in the sector.
In summary, the recent election and change in Government is unlikely to make any significant difference, positively or negatively to the local market in the short term, however it appears that this Labour Government are serious about the sector and the noise from No.10 so far can give us optimism that the recovery we have seen thus far in 2024 will continue and be further aided by positive news around interest rates in the second half of the year.
Here are a few news articles to help you better understand the effect of the election:
https://propertyindustryeye.com/housebuilder-shares-rise-on-back-of-labour-win/
https://moneyweek.com/investments/property/labour-election-impact-on-property-market
