On Wednesday 17 July, King Charles delivered a major speech at the Opening of Parliament, outlining Prime Minister Sir Keir Starmer's agenda for the current session. The speech sparked widespread interest and diverse opinion about the new Government's priorities and commitments.
This article offers some perspective on the pressing issues facing London’s housing market.
“My ministers are committed to building Britain forward, including through planning reforms, to speed up the delivery of quality infrastructure and housing.”
~The King's Speech, 2024
'Rebuilding Britain' emerged as a central theme in King Charles' speech, with a focus on housebuilding and the vital infrastructure that supports it. These plans, set out by the new government, build on Labour's manifesto commitments, which we have summarised here. Key housing topics include building, tenancy reform, leasehold reform and energy efficiency.
An ambitious infrastructure review has also been announced, including nationalising the railways, which, if successful, will ensure that not only new homes are built but that they are affordable and sustainable – and could help embed housebuilding plans into wider economic growth strategies.
“Stability is the cornerstone of our government's economic policy and all decisions will be consistent with fiscal discipline.”
~The King's Speech, 2024
So content-wise, the speech announced nothing that Labour hadn't already promised. But that's not the point of the speech. The King's Speech was more about the direction the new Government wants to set out, and this message of change to a more stable place is crucial now.
Richard Merrett, managing director at our partner mortgage company Alexander Hall, said: “There is certainly positive sentiment in the market due to the overwhelming landslide victory and, regardless of party politics, it feels like the country is waiting for change and the market likes stability. Foxton's sales performance showed no slowdown in June and we expect this trend to continue into the second half of the year.”
Awareness is key
Read: What a Labor victory means for the housing market
Foxtons chief executive Guy Gittins said: “It's encouraging to see the new Labour government putting urban planning reform and housing supply at the forefront of its policy for the property market.”
“New delivery targets, combined with a more streamlined planning process, should put in place the necessary measures to increase the supply of new homes coming to the market.”
“Of course, these are all great initiatives, but it is housebuilders who deliver new homes, not governments, so it will be interesting to see what incentives the government plans to give housebuilders to increase the delivery of stock homes,” he said. “Freeing up misclassified areas of the Green Belt should also help to increase supply, but this is a hotly contested area and is likely to be met with fierce opposition, as it has in the past. How the government reconciles public perception will be crucial if it is to achieve what other governments have failed to do so far.”
“And to address the demand/supply imbalance that has been prevalent for some years, it is vital that the Government seriously considers how it can encourage new landlords to invest in the private rented sector.”
“Overall, this is positive news for the property market, which should build on the momentum it has built up so far this year and support what is set to be a very buoyant final six months.”
Promising start fuels market
“It's still early days for this new government but all we're hearing are positive voices and sentiment will absolutely be important as Labour works to restore confidence, particularly on the economy. Housebuilding is the right message – inventory is the biggest challenge in the housing market for a generation. But these are targets that successive governments have set and failed to meet and we need to get to the heart of how we achieve them,” Merrett said.
“What I want to see is not just us building, but how do we actually enable development of our existing housing stock, for example by encouraging downsizing and rightsizing, freeing up trapped assets, encouraging the regeneration of commercial properties, etc.”
“So it will be important to see how they achieve that, but they are saying the right thing. In lender news, since the election several large lenders have reduced interest rates and HSBC has relaxed their LTV bands, making them more flexible for potential borrowers. In my opinion these are all positive changes which will add up by the end of the summer.”
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