The extent of Boris Johnson’s landslide victory in last week’s general election should not be underestimated. We have seen constituencies in the North of England electing a Conservative MP for the first time ever as the Labour Party vote literally collapsed. Markets have reacted positively with the housebuilding sector a major benefactor. So, what does the future hold under a new look, new style Boris Johnson government?
Worst leader in living memory
While Michael Foot has long been recognised as one of the worst Labour leaders in living memory, Jeremy Corbyn secured fewer seats in this election. The huge jump to the left, together with a lack of joined up thinking regarding Brexit, saw Labour supporters leaving the party in huge numbers. The infighting has already begun, the blame game is underway and while Jeremy Corbyn has announced plans to leave the party, he won’t leave yet. Is he becoming toxic?
New build numbers
The Tory party manifesto mentioned plans to build 1 million new homes across the UK over the next five years. While this average of 200,000 new properties per year is down on an earlier promise of 300,000 new properties per annum it is still significant. Many housebuilders saw double-digit share price increases on the stock market as investors breathed a sigh of relief and began, tentatively, to look forward with renewed optimism.
Investing in apprenticeships
As was mentioned on numerous occasions during the general election, there has been a huge shortage of investment in apprenticeships especially with regards to construction/housebuilding. We know Boris Johnson has a very healthy majority in the House of Commons but he will still be held to account by not only opposition MPs but also the general public. So, it does look as we can expect significant investment in the area of apprenticeships in order to fill the long-term void in skilled labour.
At this moment in time the idea of introducing rent controls across the UK has been “kicked into the long grass”. While still an active subject in London, where the UK government has less control, on a nationwide basis this subject would appear to be dead in the water. Plans to build 1 million homes over the next five years have been welcomed by the private rental market and will reduce upward pressure on rental rates. However, many political parties have promised a huge increase in new build numbers in the past only to fall by the wayside and disappoint again. Will Boris Johnson be any different?
Will private landlord tax rises be reversed?
The last couple of years have seen a significant change in the tax landscape of private landlords and property investors. We have seen reductions on mortgage interest relief, the introduction of second home charges and the removal of an array of useful allowances. It seems highly unlikely that Boris Johnson will reverse some of the recent tax rises immediately. He is still viewed with scepticism by many in the UK and if he was to revert back to “type” with immediate tax reductions this would not go down well. However, property markets have welcomed his appointment as Prime Minister with what is a much healthier majority than many people had expected.
Brexit, Brexit, Brexit
There is still debate, concerning and confusion regarding Brexit although in reality Boris Johnson now holds all the cards. Opposition MPs can try to delay and frustrate the Conservative government but Boris Johnson is now in total control. He has promised to work “night and day” to remove the UK from the EU on 31 January and begin work on a trade deal. We know the property markets have recently been concerned about the potential of a hard left Labour government and the never-ending saga of Brexit. Now the impact of these two issues has at worst been diminished in the short term, might we see the sector and wider economy get back on track?
In the longer term investors and private landlords will be looking towards a Conservative government for help and assistance. In reality the UK government will likely look towards the private sector to help fulfil a promise of 1 million new homes over the next five years. This could create many very interesting opportunities for property investors and a more positive vibe amongst private landlords. It is fair to say that we will see a very different side to Boris Johnson now he has a healthy majority in the House of Commons.
So, will a Conservative government revert back to type and look to assist investors and private landlords once the dust has settled? Time will tell…………………
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