Well, it’s finally happened. After months of speculation and pre-election polling, all of which centred on how Labour was going to win the election, they went ahead and won it – and by a landslide, too.
But now Labour is in power, and with Sir Keir Starmer in charge, what can we expect from the mortgage market? Will things improve, stay the same or deteriorate?
As a Maidenhead mortgage broker, we have our views. However, in the absence of any real mortgage-related announcements, we can only comment on what we know.
When it comes to a Labour government and mortgages, there are three broad topics that are worth covering. These are first-time buyer mortgages, new homes and buy-to-let mortgages.
So, let’s start with those.
The big three: #1 – first-time buyer mortgages
Labour has pledged to launch Freedom to Buy, the party’s own version of the previous government’s mortgage guarantee scheme. Whilst there aren’t yet any concrete details on what the scheme entails or how it will work, Labour has indicated that Freedom to Buy would act as a permanent mortgage guarantee scheme (and remember, the previous government’s iteration was due to end in June 2025). With the aim of helping 80,000 young, working people who struggle to save for a deposit get their feet on the ladder, we expect a flurry of first-time buyer mortgage applications as and when the scheme is launched.
The big three: #2 – new homes
The housing shortage is a perennial issue that doesn’t appear to have been fixed under the last government. Whether it will or not under this government remains to be seen. However, what we do know is that Labour has pledged to build 1,500,000 new homes within five years of being in power. Aimed at providing more affordable housing and supplying first-time buyers with a wider pool of properties to choose from, Labour aims to reform planning law and ‘get Britain building again’. Of course, an influx of properties – 300,000 a year – would stimulate the mortgage market and, as our team of mortgage brokers in Maidenhead believe, lead to more competitive mortgage rates.
The big three: #3 – buy-to-let mortgages
If you’re a landlord, then Labour’s plans to change rent control, which will see rent increases capped, and increase tenants’ rights may create some cause for concern. Of course, the Conservatives made huge changes to buy-to-let legislation under George Osborne’s watch, the result of which made becoming a landlord less appealing as the mortgage could no longer be treated as a cost from an accounting perspective. We don’t envisage Labour’s stance on tenants’ rights having the same level of negative impact, however it may mean that landlords need to be even more focussed on getting the best mortgage advice before choosing a buy to let mortgage.
The big three aside, the FT Adviser has reported that optimism in the UK housing market has reached ‘the highest level since 2022’. And, as we know, the more positive people are, the more the housing and mortgage markets move, too.
Our team of Maidenhead mortgage advisers feel that with the changing of the guard and the anticipated cuts to the Bank of England’s base rate, the next six months are going to deliver a much more fluid housing market and more competitive mortgage rates.
Thinking of a move this summer and need a mortgage? If so, contact the team directly on 01628 560820 or by emailing enquiries@altonmortgages.co.uk for expert mortgage advice in Berkshire.