How has Labour’s first year in power been for property?

There has been no shortage of announcements during an eventful first year in power for Keir Starmer’s party but the industry, while largely positive about the last 12 months, is awaiting detail about how promises will become reality before passing judgement.

Labour is less popular now than it was 12 months ago when the party swept to power at the expense of the beleaguered Conservatives.

There has been frustration from the left of the party about policy direction in relation to welfare and immigration as the looming spectre of Reform has influenced decision-making.

Concerns about impending tax rises are also impacting market confidence, while a spate of recent U-turns have, in the eyes of some, undermined the Prime Minister’s authority.

That being said, property, particularly the housing sector, has undoubtedly been one of the winners of Labour’s fledgling premiership.

The party has promised to deliver 1.5m homes by the end of the parliament and while almost everyone agrees that this target is unlikely to be met, the industry believes the steps Labour has taken to unlock the delivery of homes will see an increase in delivery overall.

Starmer has come in for criticism on the topics of welfare and immigration. Credit: UK Parliament/Maria Unger via CC BY-NC-ND 2.0; bit.ly/40heHCq

In the last 12 months Labour has pulled various policy levers in a bid to grease the wheels of the housing sector.

The concept of grey belt has been introduced as a way of freeing up more land for development, while many local authority areas have had their annual housing targets increased in a move aimed at putting councils under pressure to deliver more homes.

A refreshed £39bn affordable housing programme was warmly received and Labour’s 10-year infrastructure strategy outlines the government’s intentions to fix the country’s crumbling fundamentals from transport to the grid.

Homes England has been handed a mandate to take a more interventionist approach to regeneration – the agency recently acquired the former Merseyside Police HQ in Liverpool – while the National Housing Bank could leverage £53bn of private investment and deliver 500,000 new homes, according to the government.

Perhaps the biggest change proposed by Labour in the last 12 months is the promise to reform the Treasury’s Green Book approach to evaluating investment to ensure that projects in the North are judged more fairly.

Industry reaction

Despite these seemingly positive declarations, Rob Loughenbury, managing director of communications firm Lexington, has been underwhelmed by the Labour’s first year.

“Overall, I would give Labour 5 out of 10,” he said. “Some important and helpful decisions have been taken, but the jury is out on whether growth is happening because of, or despite, government interventions.”

He highlighted the reintroduction of higher housing targets as a positive but said he is unsure of how it might shake out.

“It remains to be seen whether local councils will respond positively through plan making and committee decisions, or alternatively if the Inspectorate has a busy few years of appeals ahead.

In year two of Labour, Loughenbury hopes to see fewer announcements and more action, especially from Homes England.

“In the coming months, we need to see more detail on how Homes England will operate in the regions as devolution gathers pace,” he said.

“The priority should be to create new partnerships, facilitate land assembly and join up pockets of expertise and resource, to attract more investment and get development moving on the key sites we are all so familiar with.”

Sean Fielding, associate director at Cavendish, said the size of Labour’s majority had brought with it stability but that the quality of leadership varied from department to department.

“There are ministers that are providing strong political leadership in their departments, and others who are very much not,” he said.

“Fortunately for us, the ones falling into the former camp are Deputy Prime Minister Angela Rayner and DESNZ Secretary Ed Miliband.

“Pledges on clean power by 2030, housebuilding and planning reform have seen businesses have the confidence to bring forward sites for development at a rate that I haven’t known since joining Cavendish in 2021.”

Onward Homes’ Bronwen Rapley welcomed the government’s social housing reforms. Credit: via Onward Homes

Michelle Spark, partner at Clarke Willmott gave Labour a six out of 10 for its first year in power, citing positive movement on the green agenda but sluggishness around infrastructure delivery.

“Undoubtedly, the government’s push for cleaner, more sustainable energy has spurred investment in green infrastructure,” she said.

“However, not all aspects of the infrastructure agenda have delivered positive sustainable results. In particular, there have been frustrations around the pace of delivery for large-scale infrastructure projects like the A66 Northern Trans-Pennine Project, which despite being granted development consent in March 2024, has yet to receive funding approval from government and is in limbo.”

The social housing sector is perhaps the one that has benefitted most from Labour’s election victory.

The £39bn AHP was described by Emma Richman, executive director of operations at Peaks & Plains Housing Trust, as a “tremendous boost” for the sector.

“I would say my sector can declare itself a winner [of Labour’s first year]”, she said.

She added that the government’s long-term rent settlement could be “transformational”.

“For decades, housing associations have suffered from rising costs, but they have had to accept a fixed, low rent.  We can now increase rent by 1% above inflation for the next ten years.  Housing associations work to 30-year business plans, so having this level of certainty for our financial projections gives certainty.”

Bronwen Rapley, chief executive of Onward Homes and chair of Homes for the North, said Labour’s first year has brought a “much-needed reset in housing policy”.

“It’s encouraging to see the issue rise up the political agenda, alongside recognition that regeneration and long-term investment are key to unlocking growth and opportunity.”

“Homes for the North looks forward to working with government to turn ambition into delivery. The North urgently needs new homes, revitalised places, and stronger communities – and with the right tools and collaboration in place, we are ready to help make that happen.”