42 days and counting….
Thoughts from our CEO, John Goodall
Remember ‘Super Saturday’? It seems a distant memory, even though it was only a week and a half ago when glimpses of a breakthrough in the political stalemate over Brexit were being debated in the House of Commons. However, the only thing that was super about Saturday 19th Oct was the rugby.
Over the last couple of weeks there have been several moments where it seems that we may have made progress with some form of Brexit agreement getting through Parliament. However, that wasn’t to be, and we now face a general election on December 12th with the winner (if there is one) announced on Friday 13th…
It was clear that while parliament was certainly against a “no-deal” exit from the EU there was not any deal or course of action beyond delaying that could command a majority. In hindsight that has probably been the case since the referendum on 24th June 2016, and certainly since the June 2017 general election. Parliament has been paralysed and this uncertainty is bad for businesses whether those businesses be mortgage lenders, brokers or landlords wanting to make investment decisions.
It is possible that an election will provide a decisive result, either for Boris Johnson’s withdrawal agreement or a second referendum. If Boris wins a majority, then his agreement should get through Parliament for the UK to leave at the end of January. If Labour win a majority, or they can form some sort of pact with Lib Dems, SNP and others then a second referendum in the Summer of 2020 is likely with us either leaving after the summer or staying. Either of these scenarios should point to some resolution in 2020. Most friends or colleagues of mine, whether they voted leave or remain seem to agree that we must move forward in some direction and I am hopeful that a General Election will allow that to happen.
Obviously if the Conservatives are just short of a majority, as they were in 2017 then we find ourselves in a similar scenario to the one we are in now. That could potentially be the worst of both worlds where we face gridlock again and the uncertainty continues. The possibility of “No-deal” could return as President Macron and other EU leaders may lose patience with us and refuse an extension on January 31st.
On housing, the two major parties are likely to have very different approaches. The Conservatives have talked about building more houses and even hinting at reducing stamp duty, although their domestic priorities seem to be around policing and education. Labour have talked about policies such as rent control, tenants right to buy and an increase in property taxes generally. Jeremy Corbyn has talked about clamping down on “dodgy landlords”. I agree that any landlords that rip off tenants or provide a poor standard of housing should face sanctions, but the vast majority of landlords are not “dodgy and I suspect that the current Labour leadership has a philosophical problem with the whole concept of a private rental sector.
If we end up with a government that has a set of policies that deter investment into the sector, that is extremely bad news for renters and the broader economy. Investment in housing is essential and we need a market that can cater for homeowners and renters alike. One assumes that those landlords who provide around 5 million rental units across the country fear a Corbyn led government more than Brexit.
Over the next week or so as we see manifestos published, we will get a better sense of what the parties’ respective policies are on housing and we can get a sense of what their priorities are. This election may not just determine what happens to Britain’s relationship with the EU, but it could have a material impact on the housing sector.
It is 42 days until the election. Whilst every election matters it seems this next election matters more than most.