In a special edition of the REDD roundtable, just five days post the election, there was no other topic for conversation than to discuss and debate (politely) what we think might be in store in the wake of Labour’s substantial majority win. To understand the potential impacts on the property market, we brought together a group of experts from various corners of the property and construction industries for this month’s REDD roundtable discussion.
The new Chancellor Rachel Reeves committed in her first speech to "get Britain building again" through the reintroduction of compulsory house-building targets marking a significant initial step for the industry and setting the tone for our discussion. A critical question arose for the group: will the introduction of 300 new planning offices have a meaningful impact on the sector?
Sentiment across the board was that while it is encouraging to see increased investment in this area, the persistent need for housing remains hindered by over regulation and red tape within the current planning system. The addition of more planning offices, coupled with the centralisation of decision making on major infrastructure projects, is expected to make some difference to the planning process. However, these measures do not entirely address the inherent issues within the planning field, such as the reliance on internal consultation that often slow down decision-making.
Reeves also announced a Labour Government review of green belt policy, proposing to reclassify certain areas as ‘grey belt’ lands, currently deemed unsuitable for development.
Planning was seen as not the only obstacle to development at present, with the industry still reeling from high construction and financing costs. The pairing of a new Government with stabilised inflation and the first interest rate reductions forecast for the autumn, was grounds for optimism. This will foster increased confidence in the industry, which was felt around the table. This optimism has already resulted in a surge of activity in the first half of 2024. Additionally, the market has seen an influx of lenders as investment stability grows, offering promising news for the industry.
In a well documented and discussed move, the outgoing Conservative government had planned to abolish non-dom tax relief status, inputting on this topic, the group felt that if this is pushed through it could lead to a 20-30% exodus of non-domiciled individuals seeking more favourable tax environments. However, given the ebb and flow of global political instability, it is anticipated the UK’s appeal as a stable destination will mitigate any long-term impacts of this policy.
The aftermath of Brexit and inflation continues to affect the property industry, with high construction costs and reduced competition due to a smaller workforce and company closures. The new government is tasked with addressing these challenges, potentially through the promotion of apprenticeship schemes in schools and forging stronger ties with the EU to facilitate the movement of skilled labour once again.
Overall, sentiment was that Labour will need to address some of the major news-items inherited, such as the Building Safety Act, non-dom, planning backlog, urbanisation and sprawl, but the party will need more than one term to significantly implement and impact the full market landscape. ‘Simplify, simplify, simplify’ was a general cry, in all aspects from buying, to planning to realising sites.
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