Has the election actually changed anything in the housing market?
So, where to begin? So much has been said and written about the General Election campaign and subsequent result that you might think that everything had changed.
Clearly, when you have the same party in power (albeit propped up by the DUP), the same Prime Minister, and most of the big beasts in the Cabinet back in their old jobs, you might hesitate to wonder if anything has changed at all. That is on the surface though – delve a little deeper and you can see a real weakening in the power base, not just of Theresa May herself, but certainly her entire Government, and when compared to the gains made by the Labour Party and the renewed sense of confidence it has engendered it doesn’t take a genius to realise that much is different.
For the housing market however, you might need to question whether the Election has actually changed anything. Take, for instance, the announcement of the various Ministers to their roles – we had to wait three days before hearing that Alok Sharma MP would be the new Housing Minister, and to have it confirmed that (surprise, surprise) this position did not come with a seat at the Cabinet table.
Now, I don’t wish to pre-empt Mr Sharma’s ability in the role here but he appears to have little housing market experience, he will need time to learn his brief – time he will not get, and the fact housing continues to be a non-Cabinet appointment, perhaps tells its own story about both the priority it is being given by Theresa May, and how much he’ll be able to achieve.
Even with all the talk about fixing the UK’s ‘broken’ housing market as outlined in its White Paper, we still find ourselves with a junior minister who is part of the DCLG, rather than running their own Department. Compare and contrast with what the Labour Party were planning, a new Ministry of Housing, and we might well feel short-changed by the lack of action in getting rid of the pre-Election status quo.
Prior to that Election, and contingent of course on a Conservative Party securing a majority, we could at least have looked forward to the new Government setting about implementing the policies as outlined in the aforementioned, Housing White Paper and those outlined in its manifest. The recent Queen’s Speech does contain a lot from the White Paper but is this a strong enough Government to deliver on it?
For instance, while you would think building more homes was an issue with cross-party consensus, there are acute differences on how each party would go about it. You might not expect the DUP to rage against this particular house-building machine, but you can probably bet that it will be seeking more of the action within Northern Ireland, rather than on the mainland, and this might well impact on the Government’s ability to hit its targets for affordable housing supply.
Overall, we appear to be stuck in short-term political stasis, with the anticipation that the large increases in housing supply might not be so forthcoming as we would all have liked. Also, in a market which has certainly seen significant drops in purchase transactions, do we now have a Government in place that will be willing to look again at recently-introduced measures which have undoubtedly curbed the number of purchases? I’m thinking specifically of increases to stamp duty for additional properties, the end of the Help to Buy 2 scheme (although HTB1 carries on), and the continued troubles that both first-timers and landlords now have in purchasing.
Will the Treasury look kindly on rolling these back? It’s doubtful, especially now that Philip Hammond has returned to his job as Chancellor and seems to be emboldened by Theresa May’s inability to sack him – add in the fact that we have a Housing Minister who is, unfortunately, likely to have minimal influence and it’s not too difficult to see where we might end up. Not too far forward at any point in the very near future.
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