Jamie Harris, Head of Student Accommodation at Harris Associates and Co-Founder of Harris Studios sat down with one of the industry’s leading figures in land acquisitions and high-value developments, Marcus Weeks, the Director at Firethorn, to discuss what a Labour victory might mean for the living sector.
Here’s what they had to say:
How do you see Labour’s stance on rent controls impacting the living sectors?
Marcus: I think Labour has moved away from aggressive rent control measures, which is a relief. Scotland’s experience with rent controls has shown that it can stress the housing supply. Labour’s more centrist approach seems to avoid these pitfalls. Do you agree?
Jamie: Absolutely. Labour seems to be pro-business with a Tony Blair style message about change. Their reluctance to implement rent controls is reassuring. Angela Rayner was clear on not wanting to implement nationwide rent controls, something that has been a serious concern amongst developers and owners.
Also, their historical openness to immigration could boost international student numbers, benefiting the student accommodation market. This, in turn, would support regional development, bringing wider positive implications for our society, economy and real estate sector as a whole.
Rental reform seemed to be gaining momentum, but it’s gone quiet recently. Is it a moot point?
Jamie: Rental reform proposals haven’t disappeared entirely. While the Renters Reform Bill didn’t pass, Labour has pledged to revive it if they come into power.
Marcus: Yes, it remains to be seen how the revived bill might be amended during the legislative process, if it does at all? Will the changes continue to drive out private landlords, strengthening the case for the living sectors?
Labour’s immigration policies could significantly impact international student numbers. How do you see this playing out?
Marcus: Labour needs to balance public support for lower immigration with the economic need for high-paying international students. This is crucial for universities’ finances and to avoid the political ramifications of raising home student fees. It is a delicate balance. Do you think they can manage it?
Jamie: I think they can. Labour’s historical openness to immigration has always been an advantage. Attracting more international students would certainly benefit the student accommodation sector, especially if they steer clear of restrictive caps on student numbers like the Conservatives previously stated and then dropped.
Marcus: Agree, keeping the UK an attractive destination for international students is essential for the health of our universities and the accommodation sector. Labour’s approach seems to recognise that.
How do you think their economic stance will influence our markets?
Jamie: Historically, Labour has injected more money into the economy, which benefits the property industry. However, given the current financial constraints, it is uncertain how much they can actually spend. What are your thoughts on this?
Marcus: They will need to be creative given the 98% debt-to-GDP ratio they will inherit. While they have plans like the British energy initiative, they need more comprehensive solutions. The property market could benefit, but it depends on how they manage the economy overall.
How will the market’s anticipation of a Labour government affect stability and investor confidence?
Jamie: The market seems comfortable with the idea of a Labour government and has done for quite some time, unlike the uncertainty during Jeremy Corbyn’s time. I don’t foresee major disruptions unless the party swings left and there is a reversion back to the polices of a few years ago.
Marcus: For the most part, I agree, yes. Labour’s marketing is that they’ve drastically changed their policies and attitudes from the Corbyn days and now are ready to lead with some fairly centrist policies including being pro-business.
Policies that don’t majorly deviate all that much from Conservatives. This aims to give you and I the sense of stability, yet a change for the better. I think investors are generally at ease, but I expect some slowdown and nervousness until the election results are in. It is a convenient reason to delay deals, but overall, stability shouldn’t be a major issue.
Q: Labour’s focus on affordable housing could be a game-changer for developers. Thoughts?
Marcus: Yes, I see potential here. Drawing from the GLA policies under Sadiq Khan, Labour might integrate affordability more deeply into housing projects. High build costs and financing issues are concerns, but a public-private partnership might be a solution.
Jamie: If Labour offers tax incentives or subsidies for affordable housing, it could kick-start the build-to-sell sector and give developers more options.
Marcus: Their manifesto pledges to build 1.5 million homes over the next five years and reintroduce housing targets as part of reforming the NPPF. They are also focusing on brownfield and grey-belt-first development and even proposing new towns. This could massively impact the sector. What’s your take on these ambitious plans?
Jamie: They are certainly ambitious. Requiring local authorities to update local plans to deliver more homes and funding more planning officers by increasing stamp duty surcharge for non-UK residents, shows they are serious about increasing supply. If they follow through, it could really boost the housing market.
Marcus: Not to mention their commitment to the biggest increase in social and affordable house building in a generation, prioritising new social rented homes and strengthening planning obligations. Reviewing Right to Buy and increasing protections on newly built social housing are also significant. It seems like they are targeting long-term sustainability.
Jamie: Exactly. If they manage to balance these plans with the economic constraints, it could lead to a more stable and equitable housing market.
Having heard from Jamie and Marcus, what are your thoughts? How do you think a new Labour government could impact the living sector?
