As we enter the final stages of the Conservative leadership contest, it is worth pondering how the outcome may have a direct impact on the housing market, and what – if anything – you should do about it.
With just two candidates left, we now have a pretty good idea about the shape of the conservative party but they seem to be polarised on their views of both Brexit and the economy, and that can have significant ramifications going forward. We know that Jeremy Hunt has been on the Remainer side of the house while Boris Johnson is firmly of the view that, if we cannot secure an agreement on leaving, we should simply leave and be damned. This factor on its own will have an unknown dimension to the economy, even before the new policies of each candidate are taken into account, and it is best to start with that, if we are to make any sense of this complex subject.
Jeremy Hunt. While Mr Hunt has spent a lot of the last seven years in Government departments and as a Minister, he has been confined to the Department of Health, and hasn’t been involved with front-line departments dealing with housing. However, as a potential future Prime Minister, Mr Hunt has been obliged to make a policy statement on the subject, and in doing so, he has come out strongly on the house-building platform. In a speech on the 9th June, he promised to deliver 1.5 million additional homes for so-called “generation rent” over the next 10 years, as part of a radical plan to win young voters over to the party.
While the current leadership aims to build 300,000 new homes a year by the mid-2020s these will be family houses and expensive apartments beyond the means of most young people. Mr Hunt hopes to rectify that, and provide more for younger people.
Boris Johnson. We have some measure of Mr Johnson through his tenure as Mayor of London, and that proves interesting. During his early years, the number of affordable homes being delivered in the capital rose steadily, but by his last year in City Hall, the number of affordable homes built dropped to their lowest point since the early 1990s. He has repeatedly attacked Labours position of building State-owned homes and is keen to promote ownership over renting, however he has firmly stated that he believes that contractors should have free-rein over what they build rather than focusing on low-cost housing.
Mr Johnson has stated categorically that he wants to lower Stamp duty, which he has called ‘absurdly high’ and that can only be good for buyers.
On balance, it would seem that we have two candidates with separate views on housing needs, with Mr Hunt determined to pursue low-cost housing and support the market through Brexit, while Mr Johnson is resolute that builders can control the market while being more radical with Europe. However, on the premise that there is little point in building something if you can’t sell it, perhaps a little volatility is needed to help the housing market along.