On 5th July 2024, the UK awoke to the news that it had a new government. Labour won the general election with a significant majority, returning to power after 14 years of Conservative rule.
The property market, and housebuilding in particular, featured prominently throughout Labour’s election campaign, embodied by a promise to ‘get Britain building’.
Fast forward 12 months and we have just seen the end of Labour’s first year in power, offering an opportune moment to reflect on this period, and also ask what the second year might have in store.
What changes have been made?
Labour entered office with an ambitious housing agenda – and while progress has been made, delivery has often lagged behind rhetoric, often creating some uncertainty.
For example, a key early move was the scrapping of the non-dom tax regime, which was replaced by a revised residency-based model. While more accurately described as a tax reform, this shift carries significant implications for the property market.
Indeed, though the ‘Resident Non-Domiciled’ status only applies to individuals who are UK residents, its removal has introduced broader uncertainty around the UK’s appeal to international wealth. The change has introduced uncertainty, prompting caution among some international buyers.
In terms of housebuilding, Labour announced a £39 billion funding package to increase the delivery of new homes. This includes a £10 billion commitment via Homes England and plans to streamline the planning system – with AI technology proposed to accelerate processes. These initiatives could prove transformational if delivered effectively but are yet to fully come to fruition.
The government also reaffirmed its intention to enforce EPC upgrades for rental properties by 2028 for new tenancies, and 2030 for all tenancies. Yet, details remain sparse on the practical support for landlords – improving properties so their EPC rating is C or higher will likely require significant investment for buy-to-let (BTL) investors, and help will be required so they can assess the best options for which changes to make to their properties.
What these examples show is that, while some positive policy rhetoric exists, clear timelines, strong support structures, and detailed delivery mechanisms are still unclear.
As such, investors and brokers have been unable to plan with full confidence, allowing a general feeling of uncertainty to settle in.
Market impact
However, this uncertainty is not necessarily the fault of the government. Time was always going to be required for Labour to fully formulate and then implement its plans.
Moreover, the past 12 months have been defined by notable geopolitical and economic challenges, which, to a large extent, are out of the hands of Kier Starmer et al. These include constant speculation around the Bank of England’s base rate and the frequency of cuts; inflationary pressures; turbulence emanating from Donald Trump’s presidency; and international conflict.
In tandem, these factors will likely have impacted the plans and confidence levels of property investors, both in the UK and abroad. That being said, however, the performance of the UK property market, and the demand we are seeing for UK real estate as an investment asset remains strong. Industry data supports this.
For example, recent figures from Rightmove show that the number of people enquiring from the United States is up by 19% compared to last year – an eight-year high which has potentially been caused by President Trump’s second term.
What’s more, experts are predicting notable growth for UK property prices. Savills, for instance, is predicting that the average UK house price will rise by over 23% between 2025 and the end of 2029.
Such growth will rely on more clarity, and more consistent signals coming out of Westminster. Labour will need to accelerate planning reform and provide clearer guidance on tax policy if it wants to restore investor confidence and unlock market momentum in its next 12 months in office.
Certainty and flexibility are needed from lenders
Over the past 12 months, our focus at RAW Capital Partners has been on offering more certainty and flexibility for brokers and borrowers navigating an uncertain market.
Delivering flexibility: New fixed-rate and discount options
In May, we introduced a new range of short- and medium-term fixed-rate mortgage products. These include one-, two- and three-year fixed rates, starting from 6.50%. Moreover, we also made 0.25% discounts available on both fixed and reversion rates for UK expats and loans over £1 million – meaning qualifying clients can now access fixed-rate products from as low as 6.00%.
Greater leverage: Higher LTVs and faster decisions
More recently, we increased our maximum loan-to-value (LTV) from 55% to 70%, giving borrowers greater leverage at a time when many lenders remain cautious. This update can be combined with our core offerings, such as decisions in principle within one business day and no stress testing.
It’s already allowing us to better support expat and overseas borrowers, and this case study in PropertyWire is a good demonstration of how: RAW Capital Partners delivers 70% LTV BTL mortgage to UK expat and partner.
These changes have been about responding to real market needs – providing brokers and their clients with practical options, which we have delivered quickly and with clarity, regardless of what’s happening in Westminster.
Looking to the future
We know that the market remains challenging. But, as the Bank of England base rate continues to fall at a steady rate, and buyer confidence starts to return, we expect house prices to rise.
Our focus remains on continuing to work closely with brokers, staying flexible in our approach, and ensuring we’re lending in a way that reflects current market realities.
The coming months could bring further change – whether political, economic, or regulatory. But whatever the conditions, we’ll continue to support investors with lending that’s clear, fast, and built around their needs.
Need support in placing your next case? Get in touch with the RAW Capital Partners team: https://rawcapitalpartners.com/