But, despite the benign atmosphere, there is set to be heightened scrutiny of Labour's policies on housing. Just 72 hours into the role, Rachel Reeves, the new Chancellor, set out plans for planning reform in a bid to boost economic growth. Behind this focus lies the view that the Conservatives' failings in this policy area were among the key factors that swept Keir Starmer into 10 Downing Street. The new Prime Minister knows that his administration will be closely judged on its ability to deliver on its many housing promises.
Speculation is mounting about the timing of interest rate cuts. This decision, made by the Bank of England, is likely to have a bigger influence on the short-term trajectory of the housing market rather than Downing Street. A cut is expected in August or September which should provide a fillip to the property market. But the Bank will only move if it is happy with the economic data, and it will be much slower to trim rates than it was to raise them.
We expect the market to pick up pace over the next few months, as election uncertainty recedes. The mood in the prime housing sector became more cautious as polling day approached. But political uncertainty in Europe may dispel this concern, with Britain being seen as a safe haven.
Longer-term housing policy will increasingly shape the debate. However, it’s hard to see any big changes for the market as Labour policies are not a million miles apart from the Conservatives as they both fought for the centre ground.
The emphasis on housing means that there will be huge interest in the announcements made in the new government's first Budget in the autumn. They’ve committed to hold only one fiscal event each year, which will give households more ability to plan longer-term. They’re likely to take tough decisions early in the parliament, having secured a large majority with a fairly strong mandate.
" We expect the market to pick up pace over the next few months, as election uncertainty recedes."
The statement is expected to outline how the government will keep its promise of building 1.5 million new homes over the next five years, delivering the biggest increase in the construction of social and affordable dwellings in a generation. However, the policy levers they can pull are unlikely to deliver a housebuilding boom quickly.
Special help will be provided for first-time buyers, giving them the first chance to buy homes in new housing developments and offering a government-backed mortgage guarantee scheme, Freedom to Buy. Other pledges include a series of ‘new towns’ for the 21st century, with well-designed homes, green spaces, reliable transport links and bustling high streets.
A blitz of planning reforms and reinstatement of housebuilding targets will support these policies with ‘planning passports’ to speed the arrival of high density housing on urban brownfield sites. If local authorities rule against development on 'grey-belt' land, ministers will be able to intervene. Grey-belt sites are poor quality green belt plots such as former car parks or tips.
Also proposed are significant changes to the compulsory purchase compensation rules, under which landowners would be awarded ‘fair’ compensation rather than prices based on the prospect of planning permission.
Meanwhile, the hiring of 300 new planning officers will attempt to address the criticisms from developers of all sizes about delays in the planning system. But this may not be an adequate remedy, given the underfunded state of planning departments. Less than half of councils have an up-to-date local plan, for example. As a result, the new government may be as frustrated as their predecessors in the quest to boost housebuilding.
There will be action too in another contentious area - leaseholds. The new government will implement the Conservatives' Leasehold and Freehold Reform Act which aims to tackle the problems faced by leaseholders, but with one important addition - ground rents will be capped.
The objective is to phase out leasehold, requiring all new flats to be sold as commonhold. This should increase transparency and reduce lease extension costs for the five million leaseholders in England, potentially making the process of buying and selling leasehold homes easier.
The autumn Budget should also give guidance on the direction of private rental sector policy. Labour supports the Conservatives' Renters Reform Bill. But Section 21 ‘no fault’ evictions, which were excluded from this legislation, could be immediately abolished, and tenants will be given the power to challenge unreasonable rent increases.
Labour distanced itself from a study recommending rent controls. While Chancellor Rachel Reeves recently said she could see a case for such caps in some locations, she does not favour a ‘blanket approach'. Nevertheless, while the majority of landlords have already planned for further regulation, it could cause more to sell up.
There are risks for tenants too. The removal of Section 21 could create a public database of tenants who have been served with a Section 8 notice instead - mostly because they were in arrears or had committed anti-social behaviour. Since it will become more costly to evict problem tenants, landlords may increase their vetting processes, making it difficult for some tenants to find a home.
" While policy changes have the potential to shape the market in the long run, it's confidence and affordability that will continue to drive moves this year."
Speculation surrounding taxation will be considerable. Labour's commitment to leave the rates of income tax, national insurance and VAT unchanged is welcome news. While there was no detail in the manifesto, landlords and second homeowners could be targeted with tax changes in the future. The prime minister has ruled out the imposition of capital gains tax (CGT) on people selling their main home. Yet CGT and inheritance tax could still be tweaked to obtain more revenue.
One group will definitely face higher bills. Non-UK residents buying a property here will be hit by an additional 1% stamp duty surcharge. They will pay an extra 3% in stamp duty if acquiring a main home or an additional 6% on a second home.
Whatever the government, the property market is always a source of fascination and over the next few months, this will be particularly so. While policy changes have the potential to shape the market in the long run, it's confidence and affordability that will continue to drive moves this year.