{"id":31168,"date":"2024-07-20T13:34:34","date_gmt":"2024-07-20T13:34:34","guid":{"rendered":"https:\/\/www.thehouseshop.com\/property-blog\/uk-finance-real-estate-markets-react-to-election-outcomes\/"},"modified":"2024-07-20T13:36:09","modified_gmt":"2024-07-20T13:36:09","slug":"uk-finance-real-estate-markets-react-to-election-outcomes","status":"publish","type":"post","link":"https:\/\/www.thehouseshop.com\/property-blog\/uk-finance-real-estate-markets-react-to-election-outcomes\/","title":{"rendered":"UK Finance &#038; Real Estate Markets React to Election Outcomes"},"content":{"rendered":"\n<!-- SEO Ultimate Plus (https:\/\/seoultimateplus.com) - Code Inserter module -->\n<script async>(function(s,u,m,o,j,v){j=u.createElement(m);v=u.getElementsByTagName(m)[0];j.async=1;j.src=o;j.dataset.sumoSiteId='b68b392479b5981b8acf46565e9fe32a0734fc21a1f7c1e60121eaa6ca1a1c64';v.parentNode.insertBefore(j,v)})(window,document,'script','\/\/load.sumo.com\/');<\/script>\n<!-- \/SEO Ultimate Plus -->\n\n<p>The United Kingdom took to the polls on Thursday, 4 July 2024, as they voted in the Labour Party and ended the 14-year reign of the Conservative Party at the helm of the country\u2019s affairs. The elections were significant as the two leading parties had vastly different views on the UK\u2019s domestic issues, from economic and immigration policies to foreign affairs. Here\u2019s how two of the UK\u2019s markets, the financial and real estate sectors, are reacting to the election of Keir Starmer.<\/p>\n<h2>UK Financial Markets<\/h2>\n<p>The UK financial markets were largely relaxed following Starmer\u2019s landslide victory, which saw the Labour Party sweep the polls. Analysts believe the long-predicted victory gave markets enough time to adjust, hence the relaxed situation. The British pound held in the <a href=\"https:\/\/www.oanda.com\/uk-en\/trading\/\" target=\"_blank\" rel=\"noopener\">forex trading<\/a>\u00a0market on election day, ticking slightly against the US dollar and the euro the next day. The pound remains the strongest-performing currency against the USD in 2024.<\/p>\n<p>The PM\u2019s silence on tax policies may have also contributed to the stability enjoyed across financial markets, as investors took it as a positive sign that Liz Truss\u2019s disastrous announcement in 2022 would not be repeated.<\/p>\n<p>The stock markets also performed admirably, with mid-cap stocks rising. The \u00a0FTSE 250 hit a two-year high, rising 1.8%, while the FTSE 100 index hit 0.2% in gains. Goldman Sachs has also revised its forecast for the 2025 and 2026 GDP growth to 0.1 percentage points following the elections. Analysts at the company say that the Labour Party\u2019s manifesto could drive demand for the GBP.<\/p>\n<h2>Real Estate Stocks Jump<\/h2>\n<p>The real estate market also reacted to Labour&#8217;s triumph at the polls, with several stocks gaining as much as 4% in one day.<\/p>\n<p>The UK homebuilders index (.FTNMX402020) jumped 3.2%, while Persimmon, Taylor Wimpey, Vistry\u00a0and Barratt\u00a0(BDEV.L) gained nearly 4% on the FTSE 100 (.FTSE). Building materials suppliers also benefited, with Travis Perkins (TPK.L), Howden Joinery (HWDN.L), Forterra (FORT.L), and Ibstock (IBST.L), all climbing between 1.5% and 3.3%.<\/p>\n<p>The UK real estate market is also enjoying a boost from Labour\u2019s Rachel Reeves, the Chancellor&#8217;s promise of getting the country \u201cbuilding again\u201d through a comprehensive building program to revitalise <a href=\"https:\/\/www.theguardian.com\/world\/article\/2024\/jul\/11\/first-edition-labour-housing-plan\" target=\"_blank\" rel=\"noopener\">Britain\u2019s housebuilding<\/a>. Ms Reeves, in her first speech as Chancellor, highlighted her commitment to making the \u201chard choices\u201d to fix the UK\u2019s economy and 1.5 million homes.<\/p>\n<p>Ms Reeves also presented her plan to investors and business leaders to attract much-needed investments to Britain and unlock billions of pounds for the real estate sector and green economy. Additional projects in the transportation and energy sectors will complement efforts to get the economy growing as they prioritise infrastructure that has been left \u201cunresolved.\u201d<\/p>\n<figure style=\"text-align: center;\"><img src=\"https:\/\/www.thehouseshop.com\/property-blog\/wp-content\/uploads\/2024\/07\/image1-11.png\" alt=\"Image1\" \/><\/figure>\n<h3>Potential Issues in the Housing Sector<\/h3>\n<p>The Labour Party\u2019s pledge to outlaw evictions under Section 21 created among landlords and investors, who are now considering selling off to stem losses.<\/p>\n<p><a href=\"https:\/\/bills.parliament.uk\/bills\/3462\">The Renter\u2019s Reform bill<\/a> is currently in the House of Lords and is estimated to become law by 1st October 2024. While Ms Reeves previously expressed her preference for rent caps, her party may crack down on no-fault evictions, forcing landlords to keep law-breaking tenants and causing substantial potential losses.<\/p>\n<p>The Renter\u2019s Reform Bill may also significantly change how landlords offer services. Many may opt for a relatively safer holiday service than long-term and regular tenancy. Such a situation may dampen investors\u2019 confidence in real estate stocks and trigger massive selloffs.<\/p>\n<h2>Predictions for UK Markets Under Labour<\/h2>\n<p>Analysts believe Labour\u2019s promise of stability can improve the UK\u2019s economy in diverse aspects. Victoria Scholar, head of investment at Interactive Investor, noted that if the party can \u201censure fiscal stability,\u201d more investors will have confidence in the UK economy, which could lead to the outstanding performance of domestically focused mid-cap stocks.<\/p>\n<p>There are also strong possibilities of a tax hike in the future, despite Labour\u2019s disposition to taxes. The Bank of England has also postponed its <a href=\"https:\/\/uk.finance.yahoo.com\/news\/uk-interest-rates-bank-england-general-election-110144334.html\" target=\"_blank\" rel=\"noopener\">interest rate<\/a>\u00a0cut, leaving the 16-year high rate of 5.25% running. The apex bank noted that the election schedule did not factor in its decision, but the inflation rate target remained a key factor.<\/p>\n<p>The Labour-led parliament will likely scale laws faster, reducing indecisions and providing clarity for investors on critical matters. This could positively impact financial markets in the coming months.<\/p>\n<figure style=\"text-align: center;\"><img src=\"https:\/\/www.thehouseshop.com\/property-blog\/wp-content\/uploads\/2024\/07\/image3.png\" alt=\"Image3\" \/><\/figure>\n<h6><span style=\"color: #999999;\">Ref: 3900.33995<\/span><\/h6>\n","protected":false},"excerpt":{"rendered":"<p>The United Kingdom took to the polls on Thursday, 4 July 2024, as they voted in the Labour Party and ended the 14-year reign of the Conservative Party at the helm of the country\u2019s affairs. The elections were significant as<span class=\"ellipsis\">&hellip;<\/span><\/p>\n<div class=\"read-more\"><a href=\"https:\/\/www.thehouseshop.com\/property-blog\/uk-finance-real-estate-markets-react-to-election-outcomes\/\">Read more &#8250;<\/a><\/div>\n<p><!-- end of .read-more --><\/p>\n","protected":false},"author":81,"featured_media":31165,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"wl_entities_gutenberg":"","_lmt_disableupdate":"","_lmt_disable":"","spay_email":""},"categories":[1],"tags":[],"wl_entity_type":[602],"modified_by":"Editor","_wl_alt_label":[],"jetpack_featured_media_url":"https:\/\/www.thehouseshop.com\/property-blog\/wp-content\/uploads\/2024\/07\/image2.png","wl:entity_url":"http:\/\/data.wordlift.io\/wl0502\/post\/uk-finance-real-estate-markets-react-to-election-outcomes","_links":{"self":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/31168"}],"collection":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/users\/81"}],"replies":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/comments?post=31168"}],"version-history":[{"count":1,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/31168\/revisions"}],"predecessor-version":[{"id":31170,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/posts\/31168\/revisions\/31170"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/media\/31165"}],"wp:attachment":[{"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/media?parent=31168"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/categories?post=31168"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/tags?post=31168"},{"taxonomy":"wl_entity_type","embeddable":true,"href":"https:\/\/www.thehouseshop.com\/property-blog\/wp-json\/wp\/v2\/wl_entity_type?post=31168"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}