Following Andy Burnham’s appointment as Prime Minister, attention is inevitably turning to what a new leader could mean for the UK housing market.
For homeowners, buyers, sellers, landlords and tenants, the change raises a number of questions. Will existing housing reforms continue as planned? Could we see further changes affecting landlords and the private rented sector? And might property taxation become an area of focus for the new Government?
While a new Prime Minister can bring a change of emphasis, a substantial programme of housing reform is already underway. As a result, one of the biggest questions may be whether Andy Burnham introduces significant new policies or concentrates on delivering the commitments the Labour Government has already made.
What are Labour’s existing housing commitments?
Andy Burnham has indicated that he intends to broadly implement the manifesto on which Labour was elected.
Housing formed a significant part of those commitments, including plans to:
- Build 1.5 million new homes over the course of this Parliament
- Deliver a significant increase in social and affordable housebuilding
- Prioritise development on brownfield land
- Develop a new generation of New Towns
Planning reform is expected to play an important role in increasing housing supply.
Labour’s existing plans include reforming the planning system to help speed up housing delivery, restoring mandatory housing targets for local authorities and recruiting an additional 300 planning officers.
There are also plans to review Green Belt land and make greater use of lower-quality ‘grey belt’ land where appropriate.
Alongside housebuilding and planning, leasehold and commonhold reform is another important part of the existing housing programme.
Proposals include making commonhold the default tenure for new flats, strengthening leaseholders’ rights, tackling excessive service charges and unfair management practices, and ending the sale of most new leasehold houses.
Which housing reforms are already underway?
Although a change of Prime Minister naturally raises questions about future policy, many significant housing reforms have already progressed.
The Renters’ Rights Act is now being implemented, while leasehold and commonhold reforms continue to move forward.
Seven New Towns have been announced, additional funding has been committed for affordable and social housing, and planning reforms are progressing through Parliament.
For the new Government, therefore, delivering existing commitments may prove just as important as announcing new ones.
One of the biggest challenges will be meeting Labour’s target of building 1.5 million new homes during this Parliament.
While changes to the planning system may make it easier to deliver new homes over time, the economics of development remain challenging.
The Home Builders Federation estimates that the cost of delivering a new home has increased by around £76,000 since 2020. Around half of this has been attributed to increased labour and material costs, with the remainder linked to additional policy, regulatory and tax requirements.
Higher borrowing costs and questions around development viability could also make increasing the supply of new homes more difficult.
What could happen to digital ID?
One early indication of how Andy Burnham’s Government may differ from its predecessor is the proposed national digital ID programme.
The new Prime Minister has indicated that he intends to scrap the programme.
While digital ID may not immediately appear to be a housing issue, a national digital identity system could potentially have played a role in the property sector.
For example, it might have supported Right to Rent checks, helped simplify identity verification during property transactions and potentially assisted efforts to reduce fraud.
Mr Burnham has said that the estimated £1.8 billion cost of the programme could instead be directed towards measures designed to ease cost-of-living pressures, although questions have been raised about how much of this funding would actually be available for alternative spending.
Could England see rent controls?
For landlords and tenants, one area likely to attract particular attention is the possibility of rent controls.
Different forms of rent regulation already operate in some parts of the world, including measures introduced in Scotland, and there has been ongoing debate about whether England could eventually adopt a similar approach.
Supporters of rent regulation argue that carefully designed controls could improve affordability and give tenants greater certainty while additional homes are being built.
Research published by the Joseph Rowntree Foundation has suggested that rent controls introduced alongside wider tax reform and measures to increase housing supply could help improve affordability.
Dr Beth Stratford and colleagues at University College London’s Institute for Innovation and Public Purpose have also argued that carefully designed rent regulation, potentially including exemptions for new-build properties, could offer greater security for tenants while seeking to protect investment.
There is, however, considerable opposition to rent controls.
Critics argue that restricting rents could discourage landlord investment, reduce the supply of available rental homes and ultimately make it more difficult for tenants to find suitable accommodation.
Labour has so far rejected introducing rent controls in England, including while Angela Rayner was Housing Secretary.
Whether the new Government revisits that position remains uncertain.
Could property taxation change?
Tax is another area where there has been considerable speculation.
Before becoming Prime Minister, Andy Burnham indicated that he would be prepared to consider aligning Capital Gains Tax more closely with Income Tax rates, provided any changes were consistent with Labour’s wider fiscal commitments.
If such a change were eventually introduced, it could have implications for residential property investors.
There has also been speculation about potential changes to Inheritance Tax and further reform of Stamp Duty Land Tax.
However, speculation should not be confused with confirmed Government policy, and no formal proposals for these changes have been announced at the time of writing.
Stamp Duty is already a considerable expense for many people purchasing a property, with buyers in higher-priced parts of England often facing significantly larger bills.
Could social housing become a bigger priority?
Increasing the supply of social housing has long been an important part of Andy Burnham’s approach to housing.
He has also expressed an interest in building on Greater Manchester’s ‘A Bed Every Night’ initiative as part of efforts to tackle homelessness nationally.
The initiative has attracted praise, but rising homelessness and the number of households living in temporary accommodation demonstrate the scale of the challenge.
Housing organisations have also called for the freeze on Local Housing Allowance to be lifted, arguing that increasing support could improve affordability for lower-income households and help reduce pressure on homelessness services.
The extent to which these issues become a greater priority for the new Government is likely to become clearer over the coming months.
How much scope is there for further housing reform?
Ultimately, the question may not simply be what Andy Burnham wants to change, but how much the Government can realistically deliver.
Public finances remain under pressure, and many substantial housing reforms are already underway.
There may also be limited appetite within parts of the property industry for another significant wave of legislation before existing changes have had time to take effect, particularly in the private rented sector.
Attention will therefore turn to the Government’s next major fiscal announcements for signs of whether the Prime Minister intends to accelerate the existing housing programme, introduce further reforms or concentrate resources elsewhere.
The success of the Government’s housing policy may ultimately depend less on the number of new policies announced and more on its ability to increase housing supply, improve affordability and strengthen confidence in the property market.
What should homeowners, buyers and landlords watch next?
Political change can create uncertainty, but Government policy is only one of many factors influencing the housing market.
For buyers and sellers, mortgage rates, affordability, property supply and demand, and conditions within the local housing market can all have a significant impact.
Landlords will also want to keep a close eye on the implementation of rental reforms and any future announcements concerning taxation or regulation.
Until further policies are formally announced, it is important to distinguish between confirmed Government plans and speculation about what could happen next.
If you’re considering buying, selling or letting a property, understanding conditions in your local market can help you make a more informed decision.
Speak to your local Reeds Rains team or arrange a property valuation to find out more about the property market in your area.
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FAQs
What are Andy Burnham’s housing priorities likely to be?
Based on the programme discussed in the article, priorities could include increasing housing supply, planning reform, affordable and social housing and continuing reforms already underway.
Will existing Labour housing reforms continue?
The article states that Andy Burnham has promised broadly to implement the manifesto Labour was elected on, suggesting significant elements of the existing programme could continue.
Are rent controls planned for England?
There is currently discussion around rent regulation, but the material supplied does not identify it as confirmed government policy.
Could landlords face higher taxes?
The article discusses possible Capital Gains Tax reform, but this is speculative rather than a confirmed change.
What could happen to housebuilding?
Delivering 1.5 million homes remains one of the central challenges identified in the article, with development costs, borrowing costs and viability highlighted as barriers.
What should buyers and sellers watch for?
Formal government announcements on taxation, planning and housing policy will be more significant than speculation. Local supply, demand, mortgage costs and affordability will also continue to influence individual property decisions.
The Reeds Rains Content Marketing Team
