Labour's win could shepherd in further mortgage rate cuts by the end of 2024, according to some in the industry.
Nick Mendes, mortgage expert from John Charcol, believes the Labour win could mean mortgage rates drop in the coming months.
He said by the end of 2024, two-year fixed mortgage rates could potentially fall to 3.75 per cent and 2-year fixes to 4 per cent.
Mendes added: “While Labour's housing and economic policies aim to support lower mortgage rates and greater accessibility for first-time buyers, the overall impact will depend on the market's perception and the successful implementation of their proposed policies.
“From our current position, we do not expect to see the volatility of recent years.”
Charlotte Nixon, mortgage expert at Quilter, said Labour’s pledge to build 1.5mn new homes and overhaul the planning system could go some way to addressing the housing crisis.
However, she said the “freedom to buy scheme”, which aims to make the mortgage guarantee scheme permanent is less likely to address issues of affordability and accessibility.
She said: “While well-intentioned, this policy alone does not tackle the fundamental problem of high property prices relative to average incomes.
"First-time buyers often struggle with borrowing limits and the risk of negative equity, especially in a market characterised by high loan-to-value ratios and fluctuating house prices.
"Without a significant increase in the supply of genuinely affordable homes, schemes like 'freedom to buy' offer limited relief to those priced out of the market.”
Myron Jobson, senior personal finance analyst at Interactive Investor, said Labour’s first budget will be a crucial point for the party.
He said: “This could involve reaffirming its position to maintain the state pension triple lock and dispelling speculation of changes to pension allowances and taxation, as well as keeping the freeze on income tax thresholds that means more of our income will end up in the taxman’s coffers over time (known as fiscal drag).
“Also, many first-time buyers will be waiting with bated breath to see whether the pledge to make permanent the mortgage guarantee scheme designed to ensure low-deposit mortgages will see the light of day, and, if so, how quickly it will be rolled out.”
However he said it remains to be seen what happens to the Tory policies including the British Isa and pot for life pension.
tara.o'connor@ft.com
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