Sir Keir Starmer

Property development industry welcomes Labour landslide, fuelling hopes for housebuilding boom



The property development market is eager for increased private investment and a planning overhaul under Sir Keir Starmer’s leadership, after Labour won a landslide victory in the UK general election in the early hours of the morning.


Starmer will now be the new prime minister after the Conservatives suffered huge losses after 14 years in power.

At the time of publishing, Labour has won 412 seats, while the Conservatives have 121, down 250 since 2019.

Liberal Democrats have 71 seats so far.

Property development industry reacts to general election results

Tom Lloyd-Jones, chief investment officer at Zenzic Capital, hopes that Labour will encourage a surge in private investment to create an attractive environment to finance home delivery.

“In our view, SME homebuilders have significant untapped capacity,” said Tom.

“Smaller homebuilders have suffered from a lack of institutional capital in recent years, but we have noted that UK pension funds have started to directly fund investment strategies targeting the construction of new houses in the UK.

“This is to be welcomed and may increase with encouragement from central government.”

James Dickens, managing director at Wavensmere Homes, said it was positive to see a moderate party elected with a strong mandate, providing much-needed political stability.

“After 14 years of the Conservatives in No 10, this new Labour administration has promised sweeping reforms to the planning system and a reintroduction of mandatory local housing targets.

“Indeed, during Sir Keir, Angela Rayner, and chancellor of the exchequer Rachel Reeves’ recent visits to our live sites, we were reassured that a planning overhaul would be central to Labour’s economic policies.

“Hiring 300 additional planners to help expedite decisions will be a small step in the right direction, but many more policy and legislative changes are required to address the chronic lack of supply of new homes.”

Mark White, managing director at Bargate Homes, highlighted that SME housebuilders will be looking for “swift detail and action” to reverse the National Policy Planning Framework (NPPF) changes that have, in his words, been “catastrophic” for housing delivery.

“The property and construction industry is impatient to know how Labour intends to get Britain building again,” said Mark.

“While we all want to see new homes built on vacant brownfield sites, this needs to be balanced with fulfilling the huge pent-up demand for mixed-tenure residential developments in traditional villages and rural communities.

“Not everyone who has grown up living in the countryside wants to uproot to move into a city centre flat, simply to counteract the fact they are priced out of their local housing market.

He added that the new housing minister needed to act quickly to eradicate the barriers for pre-commencements in order for housebuilders to deliver more homes and generate more tax revenue.

“Section 106 negotiations should be concurrent to the review of a live planning application, so that housebuilders don’t end up missing crucial ecology seasons – or go out of business because they can’t start on site.”

According to Barry Jessup, managing director at mixed-use developer Socius, there are quick and easy wins for Labour to “back the builders”.

“They could increase the share of business rates retained by authorities for the first five years, say from 50% to 75%, to create another incentive to bring forward commercial development while also supporting local services.

“Shifting CIL and S106 payments to the end rather than beginning of developments could improve developer cashflow and ensure fewer projects stall at an early stage.”

In its manifesto, Labour pledged to deliver 1.5 million new homes over the next parliament, reform the NPPF, restore mandatory housing targets, and provide greater funding for local authorities’ planning departments.  

According to Jatin Ondhia, CEO at Shojin, Labour’s ascendancy to Downing Street marks an important moment for the property sector.

“Several ambitious pledges regarding housebuilding and investment were made on the campaign trail, but now’s the time for Starmer and his party to back up their words with actions.

“Ensuring the UK continues to remain a global hub for investment needs to be a key priority, and the real estate sector will remain a crucial market for attracting that inbound investment.

“Labour’s plans to reform the planning system and pave the way for affordable housebuilding present significant opportunities for greater investment into property development, but the effective implementation of their promised reforms will be key.”

Rebecca Mushing, specialist planning lawyer at Midlands-based Wright Hassall, claimed that many promises in Labour’s manifesto lacked detail on how they will be delivered.

“Some of Labour’s proposals relate to updating existing planning policies and reversing others,” she stated.

“This process is likely to take time and will require consultation.

“The planning system is crying out for positive change; the current system is having catastrophic consequences on SMEs in particular who are struggling to deal with the cost and delay in the system.

“While the system needs work and improvement, the one single change that could help would be the proper resourcing of council planning and accompanying legal departments giving them the expertise and capacity to deal with applications.”

Rick de Blaby, chief executive at Get Living, emphasised a comprehensive plan to fix the nationwide housing crisis, that attracts the capital required to build, was urgently needed.

“Everyone knows that our planning process is not fit for purpose and is holding the UK back from delivering at the scale that we could and should be.

“It will be interesting to see how Labour intends to progress its plans around new towns.

“On paper, this would help to bridge the gap, but there are some concerns around the viability of these projects.

“My view is that, where possible, the industry needs to be using its expertise to deliver the substantial infrastructure required to create places that will stand the test of time.”

Ian Barnett, national land Director at Leaders Romans Group is hopeful that an element of regional strategic planning will be introduced by Labour.

“Taking local politics out of planning would significantly speed up the process, allowing many more homes to be built; it’s exactly what we need after years of uncertainty, indecision and contradictory policies.”

Colin Brown, head of planning and development at Carter Jonas, is eager to see more high-quality, well-designed, and sustainable market and social housing.

“The new administration appears committed to delivering increased housing numbers through the creation of several new towns.  

“At one level, this is something one should welcome as part of a balanced overall development strategy, but it will be important not to place all eggs in one basket, given the long lead-in times for delivery of new communities.

“The change in administration will not easily or immediately address the dire shortage in materials, labour and, of course, planning staff as well. 

“The change of government may, nonetheless, depending on one’s outlook, bring optimism, fresh thinking and new approaches to the planning system which could prove to be good news for the planning and development sector.” 

Olivia Harris, chief executive at Dolphin Living, has pressed the new government to implement a long-term housing strategy to maximise the delivery of homes below market rent in the areas with the greatest housing unaffordability and highest demand.

“This will support economic growth, while also supporting individuals, families and communities with stable, affordable places to live."

Daniel Austin, CEO and co-founder of ASK Partners, said that reinvigorating SME housebuilders was “pivotal”.

“Incentives should facilitate access to opportunities, including allocating small land plots for development and streamlining planning permissions for brownfield sites.

“Boosting skilled labour domestically and reforming the planning system are equally crucial.”

 



Leave a comment