I read a very interesting piece by John Philips last week who said “When you’re writing an article, it definitely pays to glance at the ‘Breaking News’ before putting pen to paper.”
In his case, Theresa May had just called a ‘snap’ General Election for the 8th June –currently predicated on her getting a two-thirds majority in the House of Commons but it seems like the Labour Party will support her, and I can’t imagine there’ll be another political party in Westminster who won’t relish the prospect of an electoral battle over the course of the next few weeks.
Indeed, judging by the opinion polls, you might have thought it would be the Labour Party who would be least keen to put their fate in the hands of the British public, and one can only sense that Jeremy Corbyn thinks they can achieve a political earthquake the same as delivered by one Donald Trump last year. However, the Labour realists – particularly those with slim majorities – might be considering whether a General Election five weeks away is actually really going to be a good option for them.
Even more bizarrely, given their near destruction in 2015, it could actually be the Liberal Democrats who gain most from this early election call. Clearly, they will be doing all they can to focus this election on Brexit, and one suspects they are already figuring out how they can align themselves with the 48% who voted ‘Remain’ last year, plus those who might well have had a change of heart since last June’s EU referendum.
While there will be many Leave Conservative MPs who have convinced themselves that the country as a whole has accepted that result, I suspect they could be surprised at the support the Lib Dems might garner from taking this approach, especially if they do hold out the prospect of a second referendum, whether that might be on the ‘deal’ arranged with the EU, or indeed on actually leaving the EU in the first place.
So, what does all this mean for the housing market? Well, at a time when RICs published its latest monthly survey recently which bemoaned the low levels of property coming up for sale, then a General Election is probably not going to do any of us many favours. Those who have been around the market during such periods – and let’s not forget we’re only talking about two years ago for the last one – will know that political uncertainty can be a real brake on activity levels.
Which might make the housing market – over what is traditionally a relatively busy period – even more subdued. Certainly agents we talk to are not exactly dealing with a glut of properties on their books anyway – issues such as the high cost of stamp duty have had a serious impact, not just for those existing homeowners who feel they can’t afford to stump up this money and instead seek to spend that on their existing properties, but also of course for purchasers – especially landlords – who are having to factor in the sizeable extra stamp duty charge. Perhaps, understandably, transactions are not exactly flying across the completion threshold.
And what about the latest voting trick for the conservatives “The banning of tenant fees” introduced by Philip Hammond in the Autumn statement. Some people I am told, have even said it was a throw away gimmick that they never understood in the first place, however I could not possibly comment on that statement! This has already entered its consultation period, and I was told at a recent conference in York where a member of the DCLG (the Department for Communities and Local Government) had come to update agents and landlords their representative told us that they were listening to various industry advisors such as Shelter, who appear to be more involved with Social Housing than Private rented and were very prominent in the banning of tenant Fees in Scotland (which incidentally led to a rent increase in Scotland of over 15% but Shelter have since claimed it was only 2%!) and the RLA who again some people have indicated appear more keen on taking landlords money and legitimising there status whilst urging government not to legislate against them (rather saying “do that via agents”), In my personal opinion having heard the RLA representative at York is that this only serves to further fragment our industry rather than address the issues that exist. It definitely does not help the industry as a whole it just serves to further divide it!
With campaigns coming into full swing, this topic is slowly being moved to the side but no doubt once the election campaigns get into full swing it will rear its ugly head once more.
Now we are getting a General Election, we are already seeing even more potential vendors and purchasers adopting a ‘wait and see’ attitude over the coming weeks. Even if the result looks inevitable from the polls – a Conservative Party win with an improved majority – we all know that the polls can get it spectacularly wrong and we are dealing with a much-changed political landscape where people might well change their voting preferences from those they made two years ago. Now of course this might work in Theresa May’s favour rather than against her, and the question of Jeremy Corbyn’s leadership, and his status as a potential PM, will undoubtedly be raised repeatedly but we might still see some noticeable shifts. Indeed just the other day we saw Boris Johnson in the news for his vitriolic person attack on Jeremy Corbyn which has been cited by some pundits as a typical Eton school boy approach. Sadly nothing new there!
You never know, the Lib Dems might just pick up some disgruntled Remain votes, and what of UKIP – given the result of the EU referendum and the perception that it is a one-issue party where the issue has been resolved, will we see its support fall away and, if so, who will be the beneficiaries of those votes? The leader of UKIP (Paul Nuttall), has also just confirmed he will be standing for parliament at the general election and in addition, he has also confirmed that his party will not be contesting marginal “Leave” wards so as to give these constituencies the best chance of keeping their “leave status” as that is in the best interests of his party.
The next few weeks really are an intriguing prospective if you’re a fan of political discourse and General Elections themselves, however from our housing market perspective I suspect there will be many wishing that Theresa May had stuck to the fixed five-year term. What we can say is that housing is likely to play a major role in the Election – indeed in his first interview post-Election announcement Corbyn mentioned this – and that every manifesto will have something interesting to say on how the housing market can be ‘fixed’.
Unfortunately we are all likely to be treading water while we await the outcome of the Election and to see how the winning party might put its plan into action.
I am afraid dear readers, “That’s life!