A week after the Conservative Party Conference in Manchester, Labour Party leaders have taken to the stage in Liverpool to set out some of their plans should they win the next election. How will the plan impact property investors and landlords?
Likely to be the last round of party conferences before the next general election, there’s a greater sense of urgency to win over tired and disenfranchised voters.
Possibly the most disenfranchised group, after years of being wrongly used as scapegoats for the UK’s housing crisis and continuous legislation changes (and u-turns), landlords are keen to know what’s in store should Labour win at the 2024 polls.
Get Britain Building
In stark contrast to last week’s Conservative Conference, which did not mention housing, Labour came straight out of the blocks with promises to “back the builders not the blockers”.
With a focus on growth, Shadow Chancellor Rachel Reeves plans to reform the planning process, including reassessing existing green and brownfield sites as part of a “common sense approach”. This would include releasing low-quality green field sites such as car parks and scrublands.
Furthermore, Labour Party leader Sir Kier Starmer intends to build 1.5 million new homes, including Georgian-style townhouses in urban areas and the “next generation of new towns”. According to a report in The Times, it’s expected these new developments will focus around the Milton Keynes M1 corridor and Cambridge.
These ambitious plans are part of the Party's intentions to make homeownership more accessible and not just a "luxury for the few". It's currently unclear whether these plans will come at the detriment of the Private Rental Sector (PRS).
To facilitate the promised growth, Labour intends these developments to be about housing and supporting infrastructure, including schools, transport links and doctors’ surgeries.
For developments around existing towns, Rachel Reeves recognises residents’ resistance to projects that they see as detrimental to their community. She’s suggesting that those living in these areas should receive some incentive or reward. One suggestion is that those who live near onshore wind farms get discounted energy bills.
Will Labour Cut Taxes?
According to the Institute for Fiscal Studies, total tax revenues have increased from 33% of GDP in 2019 to 37%. Per household, per year, this is an increase of almost £3,600 over the last five years.
Rachel Reeves is keen for “working people to be paying less in taxes” but recognises the lasting negative impact of last year’s disastrous mini-budget. She adds, “I think it is quite important that somebody who wants to run the Treasury can add up.” Previously an economist at the Bank of England and endorsed by former Governor Mark Carney, Reeves clearly believes she’s the person for the role.
So far, there’s no indication of what these tax cuts would be. However, while Rishi Sunak is hinting at changes to inheritance tax, Reeves believes this is one to leave as it is: “What would people like more? Would they like their mortgages to be affordable? Or would they like to help the 3.7% of people who are paying inheritance tax?”
These tax cuts will likely be part of Labour’s pledge to tackle the cost-of-living crisis. How else they intend to address the issue is still unclear, with Starmer simply offering a promise of "long-term solutions."
Will Labour change EPC legislation?
While no one offered any specifics about property EPC legislation, it appears Labour intend to push forward with essential environmental policies; 'Clean energy' is one of their five headline missions. They plan to reinstate the ban on selling new petrol and diesel cars by 2030, a policy recently abandoned by Rishi Sunak. It looks like we'll have to wait for any real clarification on Labour's plans to make our ageing housing stock more energy-efficient.
What do Labour's plans mean for landlords?
While the conference covered some topics impacting landlords and property investors, Labour has revealed little more than the Conservatives last week. However, if they were to deliver on their ambitious development and growth plans, this would provide significant investment opportunities in both residential and commercial property.
It's fair to say Labour are not famous for being sympathetic towards landlords; earlier this year, they revealed their version of the Renter’s Reform Bill, which many felt went even further in favour of tenants than the one currently going through the motions. We’ll have to wait until the election manifestos next year for any meaningful details about their intentions.
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11th October 2023