How Will the New Prime Minister Affect the UK Housing Market?
And then there were two: Boris Johnson v Jeremy Hunt. The two candidates are in a race to be Britain’s next prime minister, with Boris the overwhelming favourite. However, we all know that Britain loves a good underdog story, so write Hunt off at your peril.
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The next prime minister will have a few things on their plate, from the small matter of Brexit, to national policies aimed at progressing the country. One of those policies is likely to centre around housing: it’s no secret that the UK is going through a housing crisis, with demand far outweighing supply.
Will Johnson or Hunt tackle the housing shortage? What will their stance be on UK housing as a whole?
We take a look at their past comments on the housing sector to get a better idea about what the future holds for the UK property market.
Looking at the stats
There is no doubt surrounding the first major issue the new prime minister will need to tackle: Brexit. The majority of the UK is becoming wearier by the day and just want a resolution, so they can refocus and get on with things.
UK politics might be in a binary world of black-and-white, where you’re either ‘Leave’ or ‘Remain’, however the reality is much more nuanced. The impact of Brexit will affect many aspects of our daily lives, and the UK property market is one of them.
The implications of a no deal could be far-reaching, to the point where even Boris Johnson – someone who is painted as a hardline Brexiter – stopped short of promising a no-deal Brexit on October 31st, which is the current date the UK is pencilled in to leave the EU.
What do we know about their current stance on housing?
Both Johnson and Hunt have stopped short of committing to any stances on housing during this leadership campaign, which essentially leaves us with more questions than answers. However, their past statements could potentially shine a light on what is in store for the UK property market.
A desire for lower stamp duty
Only last year, Johnson commented on stamp duty, which saw a 3% increase on second properties in 2016. It’s fair to say that he’s against the tax, commenting that it was ‘absurdly high’. In his Daily Telegraph column, he called for reduced or zero stamp duty for first-time buyers, stating there weren’t enough homeowners under the age of 40.
Focus on ownership over renting
Boris has stated on several occasions that not enough people under 40 own their homes, saying ‘You can’t expect young people to be automatically sympathetic to capitalism when they find it so tough to acquire capital themselves’. He also gave a speech at last year’s Conservative in favour of homeownership over renting and hinted at extending the Right to Buy scheme.
Creating more ‘New Towns’
The Conservatives, Labour and the Lib Dems all have at least one thing in common: a commitment to deliver 15 ‘beautiful’ new towns on the outskirts of London. Johnson also backs the scheme from the ‘Department of Growth’.
Pinning Jermey’s Hunt’s stance down on housing isn’t as straightforward, yet that doesn’t mean he won’t favour a buoyant housing market. As the health secretary, he was perhaps the most far removed MP from housing issues – therefore doesn’t have the same history with comments on the UK housing market.
Focus on younger renters
One of the areas where Hunt has been vocal centres around younger generations. While Johnson has gone all in on homeownership, Jeremy Hunt seems to favour votes with younger renters. If elected, he has promised to deliver 1.5-million homes for ‘Generation Rent’ over the next 10 years. This can also be seen as a direct aim at Johnson’s commitment to ‘affordable housing’, which many have suggested will be anything but affordable.
Weary of a no-deal Brexit
Hunt has said that he would take the UK out of Europe without a deal as a ‘last resort’, but would essentially like to avoid such a scenario altogether. He has spoken about a no-deal situation and the impact it could have on the UK – with the housing market possibly affected by a no deal. However, with no one confident about what a no deal looks like, it’s hard to predict the exact implications it would have on UK property.
The race for No.10 Downing Street
Once the Brexit debacle is sorted, attention will turn to general policy, of which housing will play a primary role – regardless of who is in the hot seat. Both Johnson and Hunt will need to come up with incentives to help with the construction of more houses while offering schemes and ideas to create a housing market that works for everyone.