On 4 July 2024, the Labour Party secured a landslide victory and formed a new government. From the outset, housing was highlighted as a key priority. Now, one year into Labour’s term, we take a look at how the UK housing market has evolved under their leadership and how their major housing pledges are progressing.

Housing Market Overview

According to the UK Land Registry, the average UK house price stood at £290,000 in July 2024. By April 2025, the latest figures show this had dropped to £265,000. Much of this decline is attributed to the end of the Stamp Duty Land Tax holiday in March 2025, which reintroduced tax liabilities at a lower threshold, bringing more properties into scope. It remains to be seen whether this price dip is a short-term adjustment or the start of a longer-term trend.

On a more positive note, for buyers and mortgage holders, interest rates have steadily declined since the election. The Bank of England base rate was 5.25% when Labour took office, but it now stands at 4.25%. This reduction makes borrowing cheaper and may offer some financial relief to homeowners.

These factors, lower property prices and falling interest rates may have contributed to a rise in market activity. Government data shows residential transactions increased by 25% between April (65,110) and May 2025 (81,470). However, this is still 12% lower than May 2024, just before Labour came to power. The year-on-year fall suggests that some sellers may still be holding back, awaiting further rate reductions to stimulate activity.

So, while the housing market has seen a mixed response during Labour’s first year, how are their headline housing policies faring?

The 1.5 Million Homes Pledge

One of Labour’s flagship housing commitments is to build 1.5 million new homes by the end of this Parliament (2029). The announcement was met with a blend of optimism and scepticism, some welcomed the pledge to address housing shortages, while others questioned the practicality of delivering on such a bold target.

So, how is it going so far?

A government report published in May 2025 revealed that Homes England had exceeded its 2024/25 targets:

• Over 36,000 new home starts
• 38,000 completions
• 79,000 potential homes unlocked

These figures mark a notable improvement compared to 2023/24.

However, some industry experts remain cautious. In a recent forecast, Savills projected that just 840,000 homes will be built between now and 2029, falling 42% short of Labour’s target. They point to a sharp drop in planning consents over recent years and delays in reform, including the pending Planning and Infrastructure Bill.

The Planning and Infrastructure Bill

To support the delivery of more homes, the Planning and Infrastructure Bill aims to speed up and simplify the planning process. Key proposals include:

• Reinstating mandatory housing targets for local councils
• Unlocking development on brownfield and ‘grey belt’ land
• Introducing ‘golden rules’ for development on green belt land, including commitments to affordable housing and necessary infrastructure

The bill has already passed through the House of Commons and is currently undergoing its second reading in the House of Lords. Once final amendments are made, it will be presented to the King for Royal Assent.

However, the bill has sparked considerable debate. Critics argue it may undermine local democratic processes, overburden rural communities with limited infrastructure, and place strain on an already stretched construction workforce.

The Renters’ Rights Bill

Despite the potential impact on millions of people, public awareness of the Renters’ Rights Bill remains relatively low. According to the latest Property Sentiment Index, only 30% of respondents said they knew a lot or a fair amount about it, even though 48% of those surveyed currently rent their home.

The bill aims to improve standards and security in the private rental sector. Key provisions include:

• Abolishing ‘no-fault’ evictions
• Strengthening tenants’ rights to keep pets
• Extending the Decent Homes Standard to privately rented homes
• Banning discrimination against renters with children
• Capping rent increases at no more than inflation

While tenant advocacy groups have welcomed these changes, landlords warn that tighter regulations and rent controls could deter investment in the sector. Some landlords have already indicated plans to exit the market, which may reduce supply and place upward pressure on rents.

Final Thoughts

After a year in office, Labour has clearly prioritised housing, backing ambitious pledges with financial support and proposed legislative reform. Progress is being made, but challenges remain.

Questions over planning reforms, housing delivery rates, and the future of the rental sector continue to divide opinion.