Labour has ambitious plans over the next five years regarding new homes and has set itself a target of building 1.5million, delivering the biggest boost to affordable housing in a generation.[1]
It also wants to put an end to swathes of new properties being snatched up by international investors and prioritise first time buyers in achieving their dream of becoming homeowners.
However, it is not only first time buyers that could be attracted by Starmer’s property promise. There is the possibility that this influx of affordable new housing could welcome a new generation of buy-to-let landlords.
Recent figures from the ONS show that the UK household saving ratio has risen to 11.1%[1] in the Quarter 1 of 2024. It has been rising steadily since decreasing to 6.6% in the second half of 2022.
The increases have coincided with cost of living pressures, weak consumer confidence and slower growth in household consumption. Whatever the reasons are, it indicates that despite the current financial pressures, there are people saving pots of money who may choose to invest it in property in the future.
While it is no secret that the buy to let sector is struggling right now, this time of uncertainty won’t last forever, and the opportunity to have a brand new property to generate a future income from might seem like an attractive proposition for some.
There are several reasons why current landlords are cutting their losses and selling up right now such as the Renters Rights Bill, the impending rise on capital gains tax that is expected in October and the new EPC requirements for rental properties.
The Renters Rights bill is set to overhaul the private rental sector and deliver stronger protection for tenants, including the proposal to eliminate “no fault” Section 21 evictions. While it is still in the early stages it aims to become law by Summer 2025.
Along with this, landlords will now need to ensure that all their rental properties have a minimum EPC rating of C by 2030 . This new requirement is part of the government’s Warm Homes Plan, originally outlined in its election manifesto.
While this might cause a headache and a dent in the bank balance for landlords owning older properties that need bringing up to standard, this will not be a cause for concern for any first time landlord wanting to snap up a new build, as these homes will already meet the spec.
However, this doesn’t mean that becoming the owner of a shiny new home over the next five years is going to be an easy task either, with the initial affordability potentially being the biggest barrier.
The introduction of new rules, building legislation and the increasing costs of materials are all driving the price of new build properties up, making it difficult for developers to build and stay within affordable pricing.
In 2025 the Future Homes Standard will be implemented which means that any new homes built from then onwards will produce 75%-80% less carbon emissions and concerns have already been raised as to how this will affect the price of new builds.
However, if the indication is that there is a new generation of potential landlords waiting to buy their second home, this extra demand is good news for developers who will be able to maintain their margins.
To speak to our V-Hub team about your next case, call 03300 246 246 or visit our website to view our full product range and criteria here.
[1] https://www.bbc.co.uk/news/articles/cvgw7x4y5rzo
[2] https://www.yourmoney.com/saving-banking/household-savings-rise-again-following-post-pandemic-dip/
[3] https://www.gov.uk/government/publications/guide-to-the-renters-rights-bill
[4] https://lpa.org.uk/government-confirms-minimum-epc-band-c-for-rental-properties-by-2030/
[5] https://www.cbre.co.uk/insights/articles/what-is-the-2025-future-homes-standard-and-how-will-it-impact-residential-real-estate
