Entrance door of 10 Downing Street in London
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For the last few years, the housing market has had to wrestle with its fair share of political instability.
Already battling Brexit, matters weren’t helped in the Spring when Theresa May left 10 Downing Street. Wherever your view on her sits, a change in Prime Minister inevitably brings with it a further period of uncertainty, as the market waits to assess the impact of such a major move.
We’re now a few weeks into Boris Johnson’s tenure as Prime Minister, and as of yet, where housing sits on his list of priorities is still unclear.
Boris Johnson’s plans
Johnson revealed certain plans before he won the battle to become Conservative leader when on the campaign trail, and these have offered some cause for optimism.
One of these was a promised overhaul of stamp duty – more specifically, that this would be abolished on properties up to £500,000 and that rates would come down on the top end too.
That Johnson has his eye on stamp duty is, on a superficial level, good news for the industry. Rate reductions, if brought into effect, would help stimulate the market and encourage currently reluctant buyers to make a move.
The talk on cutting rates seems to have faded considerably over the last few weeks. While the stamp duty conversation appears to still be alive, it has shifted for the time being into a different kind of discussion about moving the tax from buyers to sellers – an approach which has been denied by Chancellor Sajid Javid.
The only other area to receive vocal frontbench support right now is housebuilding.
“We are going to bring forward plans to build on brownfield sites starter homes for young people that will give them the real prospect of owning a share of their home at least, if not the whole thing,” claimed Johnson in an interview earlier this year.
Johnson seems to have been referring here to the U.K.’s starter homes initiative – a plan to deliver 100,000 new starter homes by 2020 that originally emerged during the coalition government.
The PM is right to identify housebuilding as a major issue worth tackling, especially given the news this month that housing starts and completions are still below pre-recession levels.
However, tangible progress will need to be made before praise can be given. The official website still indicates that the scheme is merely “Coming soon” – a message that has been displaying now for over three years.
Actions, not words
The biggest threat then, whether it’s on housebuilding or stamp duty, isn’t what action Boris Johnson proposes. It’s whether he actually gets around to doing the things he said he would. Will he follow through on his words?
Of course, Johnson has plenty of other levers to pull too, should he so wish. Help-To-Buy needs scrapping sooner rather than later, certain planning rules require smart deregulation, and the buy-to-let ecosystem needs a helping hand.
But again, Johnson has other pressing priorities that may well define both the impact and length of his tenure. The time and resources of the Civil Service and government offices are currently being pushed committedly into Brexit. Attention, let alone action, on housing is far from guaranteed.
For the market, that’s a big problem; consumers and industry players can’t afford to wait for closure before getting some much-needed support.