Industry urges Labour to hit ground running after election landslide

After a tumultuous few years, the property and development industry is calling on Labour to provide the stability it has long-craved, thaw the “frozen” market, and make good on its pledge to breathe new life into the housing sector.

Keir Starmer has led Labour party to a comprehensive victory at the general election, gaining more than 200 seats to oust the Conservatives in line with poll predictions.

Read more about what Labour’s election win means for the North

Having been in opposition for 14 years, Labour must now rise to the challenge of delivering on its manifesto promises, armed with a huge mandate.

After waking up to the news of Labour’s rampant return to power, the North’s property leaders have been reacting to the outcome of the election.

Quotes have been edited for clarity and brevity

Housing hopes

Having pitched itself as the party of housebuilding, all eyes will be on Labour to see if it makes good on its promises.

The party has promised to build 1.5m homes over the next parliament, speed up the planning process by recruiting 300 new planners, and build new towns.

Starmer also pledged to look at releasing low quality land from the Green Belt in a bid to tackle the housing crisis. The industry is largely in favour of this approach but does not expect it to be universally popular.

“Issues around Green Belt development have been a long-running political battleground, but Labour is clear it will build on what it deems is ‘grey belt’,” said Thomas Pearson, partner at JMW.

“This is going to upset a great many who regard the Green Belt as sacrosanct. However, many sites are designated green belt that could easily be grey: the economy needs growth, Britain needs houses.”

Andy Beattie, managing director of Sheffield-based developer Forge New Homes, will be watching for swift action to address what he describes as Yorkshire’s “acute housing shortage”.

“We need more homes in our region, and we must ensure they are delivered sustainably and operate efficiently for residents,” he said.

“This is a major challenge for the new government, and we hope it is addressed early.”

Affordable focus

While more homes of all types and tenures are required, the industry hopes there will be an increased focus on the delivery of affordable accommodation.

Chair of Homes for the North and chief executive of Onward Homes, Bronwen Rapley, said a new government provides a “fresh opportunity to provide the new affordable homes the North of England deserves”.

“We’re clear that reintroducing national housing targets and a five-year land supply, as well as continuing to allow grant funding to drive regeneration is an essential starting point,” she said.

Olivia Harris, chief executive of Dolphin Living hopes the end of 14 years of Conservative rule will bring sweeping changes for the affordable housing sector.

“The lack of genuinely affordable homes for the UK’s workers is an increasingly pressing issue that has been ignored by successive governments,” she said.

“By implementing a long-term housing strategy which prioritises to maximise the delivery of homes below market rent in the areas with the greatest housing unaffordability and highest demand, Labour can ensure that the UK remains a globally competitive destination for tourism and business.”

Build-to-rent

Build-to-rent, which has managed to weather much of the economic headwinds of recent years, should also be an area of focus.

David Mawson, chief executive of Placefirst, said single-family BTR can play an important role in providing homes for key workers.

“More than a quarter of our residents work in the health service and so we welcome Labour’s plans to reform the planning system and fast-track approval for urban brownfield development,” he said.

“This will provide more homes for key workers and facilitate the construction of high-density housing on urban brownfield sites. Greater intervention in the planning system will accelerate the delivery of homes and help to tackle the housing crisis and we look forward to playing our part.”

James Blakey, planning director at BTR developer/operator Moda has called on the new government to “fully recognise the distinction between traditional private rental and institutionally funded, professionally managed rental homes and neighbourhoods”.

“The opportunity to deliver high quality BTR homes at scale and at pace is huge. The UK’s renters deserve safe, secure homes and the BTR sector is ready to deliver, provided it’s not inhibited by restrictive policies with unintended consequences.”

Tim Roberts, chief executive of Henry Boot, also welcomed the signs for developers. He said: “While the [Labour] party has reaffirmed its commitment to increasing housing supply throughout its campaign, the complexities of our sector require careful consideration – with planning reform that can remove barriers to delivery at the top of that agenda.

“Setting ambitious targets for housing is also key, and we are looking forward to seeing clear steps to incentivise development across a mix of housing tenures, including single-family housing rental models that can boost housing supply and provide a real alternative to the ownership model.”

A tall order

Hopes for housing boost are high. The same was true after the Conservatives romped to victory in 2019. However, Boris Johnson was “ultimately foiled by his backbench MPs”, according to Paul Smith, managing director of The Strategic Land Group.

He said there is a risk the same could happen to Starmer but the is hopeful Labour will deliver on its promises.

“Having been so clear about their intentions and with a historically large majority in the Commons, Labour has a clear mandate for those reforms,” Smith said.

“Combined with the thoughtful, considered nature of the changes proposed, it must be hoped that will ensure this government is actually able to deliver them.”

Labour’s housing targets are ambitious and some are more sceptical about whether the party will be able to deliver them.

“Labour talks about 300,000 homes a year, but this is the what, not the how,” said Angela Mansell, managing director at Mansell Building Solutions.

“We simply don’t have the people to build these homes, so we need to quickly find ways to build using the resources we have in a different way.

“Modern Methods of Construction is the way to do that and building 10-20% using a systemised approach means we will make inroads. Let’s see if Angela Rayner can take on this mantle, alongside concurrently addressing land availability and planning issues.”

A housing boom, if it materialised, would put extra pressure on the workforce, warned Paul Dodsworth, construction group managing director at Caddick.

“We’re a highly skilled workforce, but we are dwindling in numbers and while we all play our part and take every opportunity we can to invest in new talent, we’re in danger of falling short due to lack of investment from the Government and the impact of Brexit. We need to see a plan of how our workforce will grow, and we as an industry need to be part of that conversation.”

The first 100 days

David Nuttall, managing director of industrial and logistics at developer Cole Waterhouse, is calling for clear messaging on key issues at the beginning of Labour’s tenure.

“In its first 100 days, Labour must provide clarity on future interest rates and offer concrete roadmaps for their ambitious industrial strategy and planning reform pledges,” he said.

Meanwhile, others are keen to see what the new government does with the Conservatives levelling up agenda.

Many consider the Tories’ flagship policy to have failed, so will Labour try to revive it or ditch it all together?

“It will be interesting to see whether the new Labour government leans into the local levelling up effort or backs off,” said Tom Kibblewhite, co-founder of Proximity.

“It’s important that momentum created in recent years continues, particularly vital investment in transport and infrastructure projects. We need to see government commitment to regeneration continuing apace.”

Aside from policies around housing, planning, and economic growth, the thing the industry is seeking more than anything is stability.

“For a document that focused on ‘change’, the Labour manifesto contained a strong focus on continuity, at least in the fiscal sense,” said Will Matthews, head of commercial research at Knight Frank.

“However, that should be good news for anyone still scarred by memories of the 2022 mini-budget, and the spike in bond yields that followed.”

He added: “And if stability seems a modest victory, then one must only look to Europe, where bond yields have risen in response to recent political uncertainty.  In the eyes of many global real estate decision makers the UK today looks, arguably, a little more like its pragmatic former self.”

The first speedbump in Labour’s plans to boost the housebuilding industry may come in Oldham. The council will vote next week on a motion to withdraw from Places for Everyone, the joint spatial strategy for Greater Manchester.

“One of Labour’s first new acts will be dealing with Oldham’s ongoing PfE grumbles,  and this will be a bellwether for its attitude towards housing policy,” said Phil Cooper, founder of Hope Architects.

“The housing crisis needs regional planning, strong plans, and ambitious targets, so PfE needs to hold firm.”

Lisa Kerford, managing director, at Aptus a multi-utility connections provider headquartered in Bolton has highlighted two issues that Labour should look at fixing early on.

“There are currently significant delays to a range of housing schemes in the North West due to lack of capacity in the National Grid, while nutrient neutrality issues are causing significant problems and hold-ups for rural developments,” she said.

“Both must be addressed urgently in order to keep up with the country’s housing needs.”

Good for business?

Dave Dargan, co-founder and chief executive of modular housebuilder Starship said Labour’s victory will “increase market confidence, boost investment and, get Britain building again.”

“All businesses thrive on financial stability and a growing economy, so I hope that the new government can put its pro-business plans into practice, with the construction industry having a key part to play in its success.”

The outcome of the election has also been welcomed by investors and lenders.

David Giovanni, managing director of Bluecroft Finance and former owner of Ascend said the change in government will bring with it a “short-term bounce in confidence”.

“The property market has frozen, really without good reason, since the election was announced and this should now be released. Interest rates will almost certainly come down in the next few months and possibly again by the end of the year.”

M&G, which has £40bn of assets under management has called on the government

Martin Towns, deputy global head of M&G Real Estate said the investor is keen to work with policymakers to “ensure a prosperous and sustainable future for our real estate market”.

M&G has outlined five key areas it wants Labour to focus on. One of those is ensuring stability for the market.

“We need a fundamental rewiring of the economic landscape built on a consistent long-term regulatory and legislative framework,” he said.

“Investors need stability in policy and regulation – and a housing minister that is in position for a meaningful length of time – to reposition the UK as outward looking and globally competitive.”

Mark Robinson, group chief executive of SCAPE, said the government must use its first 100 days to engage with the private sector to “unlock regional growth”.

“Encouraging partnerships, secondments, and knowledge sharing between public and private sectors is key to giving local authorities the tools required to deliver the infrastructure needed for UK communities to live better lives. A greener, better future won’t just happen. We need to build it from the ground up.”

Robinson is not the only one calling for greater collaboration between the public and private sectors.

Life sciences – growth opportunity

Labour said economic growth would be one of the key pillars of its leadership, which could see a continued focus on the life sciences sector.

Michael Aston, head of UK life sciences at Cushman & Wakefield said: “Life Sciences is one of the areas where they can realistically seek that growth.

“The party’s plan for the sector, published earlier in the year, signalled very welcome ambition, but we’re now eagerly anticipating the detail. One issue, for example, is how the new Labour administration will support growth in the UK’s venture capital industry, which is very much the lifeblood of biotech research and development.”

John Downes, group chief executive at Langtree, and chair of the joint venture group behind the Sci-Tech Daresbury science park, is also keen to see money continue to flow into the sector.

“The knowledge economy is a huge priority around the world, with many governments focused on creating high-value intellectual property and developing skilled workforces.

“We live in an era where breathtaking technological advances are happening all the time in areas like AI, quantum, novel materials, and life sciences while there is a pressing need to speed up the transition to lower carbon ways of living and working. It’s an exciting time and we wish the new government well in embracing the challenges and talking to business about the way forward.”