There is a growing consensus that Theresa May’s announcement that she will be leaving office on 7 June 2019 could spell the end of a disastrous period for UK private landlords. The last few years have seen a massive increase in associated costs prompting many private landlords to sell up and move on. There are a number of reasons why landlords are now more positive going forward as the end of what will probably be seen as one of the worst periods in UK political history comes to an end.
Return to Conservative values
Since Theresa May called a disastrous snap election back in 2017, resulting in a reduction in her House of Commons majority, the Tories have been looking to carry favour with traditional Labour voters. Many believe this is why we have seen an array of new costs and regulations introduced into the private rental sector. Quite simply, under Jeremy Corbyn the far left leaning Labour Party was beginning to gather momentum and increased support. So, in what many believe is a removal from core Conservative values, there was a switch away from capitalism/business towards consumers and in this case tenants.
How could private landlords benefit?
Controversial MP Jacob Rees Mogg has been one of many Tories to call for the abolition of stamp duty to help investment in the UK. This comes at a time when stamp duty for buy to let investors, and those looking for second homes, has increased. We’ve also seen the reduction of mortgage interest relief which trims yet more from the already lean profit margins of private landlords. There is growing hope that a return to core Conservative values would switch the focus back to private landlords, business and investment.
While it is highly unlikely that stamp duty will be abolished, we could see a reduction and return to previous levels.
Polarisation of UK political scene
The Conservative party have tried to attract more support from the left while the Labour party has tried to attract more support from the right. The reality is that no party has really succeeded and in many ways, under what some see as a protest vote, the Liberal Democrats seem to be making a comeback. As a consequence, it is highly likely that the next Conservative leader/PM will retrench to the right and look to sure up traditional support. At some point with this will likely mean a reduction in the overall amount of tax paid by UK workers and a reduction in the cost of investment. Stamp duty must surely be the first target?
Poisoned chalice
Many believe that the next leader of the Conservative party will be carrying forward a poisoned chalice from which their career is unlikely to recover – in effect cannon-fodder. There is a need to retrench traditional support and also push forward with Brexit – enact the will of the people. Whichever way you look at it, the next prime minister of the UK (likely to be Boris Johnson in the short term according to bookmakers) has an unenviable task on their hands. Therefore, facing a significant reduction in support when the next general election is finally called there may be nothing to lose in rolling back some of the recent property/private landlord tax increases.
In effect, this is a “kitchen sink” scenario with the Conservative party looking to take all of the unpopular decisions in the short term, take the hit and rebuild going forward. Any other strategy, such as a constant drip feed of changes and the rolling back of tax increases over months/years, would just prolong the agony.
Conclusion
There is no doubt that Theresa May effectively signed her own political death warrant back in 2017 (and perhaps that of the Conservative party in the short term) with an unnecessary and disastrous snap election. The last two years have been spent attempting to carry favour with middleground/left-leaning voters. In many ways this has alienated the traditional Conservative support base such as entrepreneurs, business people and in this particular scenario, private landlords.
Is it time for a brash new approach from the Conservative party? Will we see the left and the right of UK politics entrench and shore up their traditional support? Maybe this is what people expect, the Labour party’s socialist views helping the people and the Conservative party with its capitalist views encouraging entrepreneurship/investment. Let the battle commence!
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