How Political Instability Impacts the UK Property Market
How Political Instability Impacts the UK Property Market
Politics and the UK property market are often closely linked.
Prescott and Pickles. Rayner and Reed. Clark and Clarke. Javid, Jenrick and Gove.
No, they’re not names of advertising agencies, solicitors or even letting agents. They are just some of the members of parliament who have held notable positions relating to housing.
A constant political power shift
There is a joke within the property industry that Westminster has a revolving door for housing leaders, with the flow of people quite alarming.
There have been 15 Secretaries of State responsible for Housing, Communities and Local Government since 2006. The revolving door has also worked overtime dispatching 20 different housing ministers in the same timeframe. Does anyone remember the four months Stuart Andrew held the position?
If you’ve lost track of who currently controls housing, here’s a reminder. The Rt Hon Steve Reed OBE MP serves as the current Secretary of State for Housing, Communities and Local Government. Matthew Pennycook MP is the current Minister of State for Housing and Planning.
But if you’re buying, selling, renting, investing in property or working in the industry, does it really matter who pulls the strings at the very top?
Political meddling hits house building
That very much depends on who you are. The construction industry is more likely to hang on Mr Reed and Mr Pennycook’s every word. The decisions they make directly impact housebuilding, especially when it comes to planning.
A case in point is the Home Builders Federation (HBF), who wrote to the Office for Budget Responsibility in 2025. It said a cut to taxes and a first-time buyer affordability boost were required in order to meet the Government’s ambitious target to build 1.5 million new homes by 2029.
The HBF cited the Government’s landfill tax and new building safety levy as reasons why some sites are now unviable for new homes. These barriers to housebuilding are biting, as we recently reported. The S&P Global UK Construction PMI is trending downwards, meaning house building and civil engineering activity has dropped.
If you’re hoping for a reversal of fortunes and glut of new homes that may bring down overall purchase costs, you may have to moderate expectations. Those in power frequently fail to deliver what they promise: because they leave their positions before their work is done or they make unpopular decisions that ruffle the wrong feathers.
Take, for example, Grant Shapps. Even as one of our longest serving housing ministers (he held the position for more than two years) Shapps failed to deliver what he pledged – more new homes.
The winds of change
There is a glimmer of hope, however. Labour’s overarching changes to both the National Planning Policy Framework (NPPF) and the Planning and Infrastructure Act should ease the future passage of new homes.
Adoption of a ‘default yes’ stance to house building will add speed to the process, with more approvals likely for homes built around railways, and built upwards in towns and cities. There will also be relaxed rules for some developers who want to create higher density housing.
The majority of us – homeowners, renters and those working in the agency sector – are most affected by the actions of the biggest political guns.
Slow burn political shifts
Landlords will no doubt remember the Summer Budget of July 2015. The Conservative Chancellor of the day, George Osborne, announced a phased end to mortgage interest tax relief for landlords.
Those changes took five years to take full effect. The incremental reduction in relief forced some investors to sell up before 2020’s final reform. But this lead time wasn’t a recent record. In 2019, when she was Prime Minister, Theresa May announced the Government’s intention to scrap Section 21 ‘no fault evictions’.
While it presented a boost for tenants – a move designed to rightly make renters feel more settled in their homes – it marked the start of a long, drawn out process that shaped today’s private rental market.
The Section 21 ban went on to become a headline change in the Renters (Reform) Bill. This legislation was lost in the ‘wash up’ before the 2024 General Election and was replaced by Labour’s Renters’ Rights Bill. This finally became an Act in 2025.
This wide sweeping set of legislative changes finally took effect on 1st May 2026 – seven years after the main reform was announced.
When the market waits five or seven years for implementation, the property landscape starts shape shifting as soon as new breaks. People act in anticipation and the market reshuffles as a result.
Two sides to the waiting game
Take, for example, the ‘mass exodus’ of landlords recorded since April 2019. The Section 21 news coincided with the final stage of the mortgage interest tax relief reform. Landlords got nervous, could see they may struggle to balance the books and regain possession in the future, and decided to sell up.
Fewer rental properties resulted in rents that consistently increased in cost. Politics created a new inequality in lettings. The flipside? There has been an injection of starter homes in the sales market – homes listed on the portals that were former buy-to-lets – benefiting first-time buyers.
Knee jerk reactions
Impact isn’t always slow burning, however. It was another Prime Minister – this time Liz Truss with her Chancellor, Kwasi Kwarteng, at her side – that demonstrated how fiscal changes outside of the Government’s housing department can have the biggest impact.
Their controversial ‘mini-budget’ in September 2022 hit home buyers and owners where it hurt most – their pocket. Mortgage lenders almost immediately withdrew loans and repriced remaining products higher after listening to Truss.
Mortgage rates that were in the region of 4.7% climbed to 7%, taking more than three years to fall back below 5%. The knock on effects were an almost immediate decline in transactions and a drop in house prices.
Stamp duty: a political pawn
Although rising mortgage rates stole the headlines, the mini budget delivered good news for some buyers – a sweetener to soften the blow, some say. Sadly this was overshadowed by the negatives. Truss actually raised the stamp duty exemption from £125,000 to £250,000 and increased the threshold at which first-time buyers started paying stamp duty to £425,000.
But stamp duty has long been a vote winner. The potential for cuts (even scrapping the tax) is often used in campaigning, while slashing stamp duty bills can be shoe-horned into Budget speeches when electorate sentiment is detrimentally on the turn.
Our democracy means that Government and political figures will constantly change. So will the ideas and aims for the property market. A case in point are the stamp duty breaks mentioned above – they have already changed.
Mini storms that pass
Despite directional shifts, blips and minor turbulence, property remains resilient when looking at long term trends.
You only have to look at Zoopla’s latest report for evidence. Sales agreed ran 1% higher in May 2026, when compared to 12 months ago. This is despite buyer demand being 10% lower and politica uncertainty stemming from Iran.
Politics and property go hand-in-hand but there’s always a way to buy, sell, rent or invest. Viewber is here to assist you on your property journey. Contact us if you need help with viewings, visits, inspections, safety checks, property marketing, key management + more.
