A new Labour government will impact investing in the UK, particularly in stocks, property, bonds, and the pound.

• The Conservative Party's leadership in the U.K. will end after over a decade, as the Labour Party wins the election.
• Despite the ongoing economic uncertainty, higher inflation and elevated interest rates continue to impact the country.
• Experts predict that the stock markets and the property and housing sector are likely to be impacted, while the bond and currencies markets are expected to be affected to a lesser extent.

The Labour Party in the U.K. won a significant victory in the election on Thursday, securing its position to replace the Conservatives after 14 years, amidst ongoing economic uncertainty in the country.

High inflation has caused the central bank to keep interest rates high in the U.K. despite the Covid-19 slowdown.

During the election campaign, the two major political parties presented distinct economic and financial agendas, which could result in varying outcomes for the investment landscape.

The Labour party's promise to raise taxes on private equity fund managers' compensation sparked some doubts and prompted broader questions.

A group of experts discussed with CNBC the possible effects of a change in government on U.K. investment.

Stock markets

Experts predict that the overall equity markets will not experience a significant reaction to the election results, but individual stocks and sectors may be affected.

"According to James McManus, chief investment officer at Nutmeg, markets typically remain uninterested in the truth about elections, as historical data indicates that election results seldom cause significant market movements when the predicted outcome is realized."

In a note published this week, Susannah Streeter, head of money and markets at Hargreaves Lansdown, agreed with McManus' comments but also mentioned the potential impact on the economy.

If Labour wins the UK election, it could lead to a more stable period for the country, thereby improving investor confidence in the UK.

The political landscape in the U.K. has been marked by frequent leadership changes, resulting in market turmoil, particularly during the brief tenure of former PM Liz Truss.

Specific stocks in certain sectors, such as utilities, could be affected by Labour's plans to increase fines for water companies, which are already facing high costs. On the other hand, U.K. airspace stocks could benefit from additional spending on new technology and equipment due to the party's pledge to boost the country's defense budget.

Property markets and housing

The construction of more houses could affect the property and housing market, according to Richard Donnell, executive director for research at Zoopla, as he shared his insights with CNBC.

""The new Government's focus on home building is attractive to investors, who want more investment in housing and the delivery of homes the nation needs," he said."

Hargreaves Lansdown noted that some housebuilding stocks may experience growth due to Labour's plans to construct new, affordable homes.

According to McManus of Nutmeg, wider economic developments will also impact the housing market as interest rates are expected to decrease, resulting in lower mortgage rates. This could lead to an increase in home buying or selling activity, which could have a ripple effect on other businesses such as furniture and DIY shops.

The British pound

Strategists and economists predict the will not be impacted strongly by the election.

According to Shreyas Gopal, strategist, and Sanjay Raja, senior economist at Deutsche Bank, the U.K. election results will likely divert attention away from the election quickly.

They stated that for EUR/GBP, focusing on the French election and the upcoming UK data in mid-July is crucial to determine if the BoE can proceed with a first rate cut in early August.

Under a Labour government, there are not significant risks for the pound in the long run, according to Francesco Pesole, FX strategist at ING, who stated this to CNBC. He added that potential Brexit deal renegotiations would likely be more growth-oriented, and the risk of excessive government spending is low.

Pesole suggested that the pound could still face challenges.

The pound is expected to depreciate against the euro in the next 24 months due to larger Bank of England cuts compared to the ECB, as well as higher taxes in the U.K., which could weaken its currency regardless of the election outcome, according to Pesole.

Bond markets

Earlier this week, Streeter of Hargreaves Lansdown stated in a second note that bond markets have not reacted to potential new policies under Labour.

Rachel Reeves, Labour's economy spokeswoman, proposed changes to government borrowing rules to stimulate growth and investment during the campaign. However, Streeter noted that the bond market appears to be concentrating on other matters.

The incoming government's investment plans have not affected the debt markets, as bond investors are more attuned to interest rate speculation, according to her statement.