With Boris Johnson one week away from marking his official first month in office, we examine what (if any) changes have taken place and what noises have been made from cabinet colleagues in regards to policy changes.
We’re sure you’re all aware by now that Boris Johnson is now Prime Minister of the UK. At present, is difficult to predict a solid outcome as to how this will impact the property sector, with a divide of skeptics recalling many failed or low-impact plans when he was Mayor. However, the initial reaction for those in the property sector is hopeful, as he begins to take charge of a Government that has several flagship housing market measures underway. It is safe to say that the next few months are highly anticipated by many, both based in the UK and overseas. We delve into the possibilities of Stamp Duty reformation, the potential regulation of the estate agency market, along with a resolution for the capital’s rental market.
Brexit: What’s Next?
One thing that reduces any investment potential, in any sector, is uncertainty. Boris has certainly killed off any uncertainty that surrounded his predecessor with his commitment to leave the EU by 31st October. Regardless of what side of the fence you sit on regarding Brexit, knowing which road we are going to go down is certainly a step in the right direction.
This “can-do” spirit to deliver Brexit is welcomed by many, as for months now the property market has become somewhat stagnated due to the uncertainty. It would seem that the property market is a high priority for Boris, although there are concerns that these plans will ever come to fruition, resulting in Brexit having more of a negative impact on the market. We’re optimistic about Boris’ plans to deliver Brexit come October, and the benefits this will have on the property market, particularly in investment.
Stamp Duty Changes
Only this weekend we are seeing signs that Stamp Duty could switch from the buyer to the seller. So the question on everyone’s lips is how will this affect the market. Well, in our opinion it won’t. As we have seen with the recent change in lettings legislation (where letting agents can’t charge certain fees), you are simply robbing Peter to pay Paul. As with the potential Stamp Duty changes, we feel that if the seller gets hit with the fees, they will simply increase the price of their property. Nick Leeming, Chairman of Jackson-Stops expresses his thoughts surrounding the charges, saying, “Prohibitive stamp duty charges have long been a challenge for those on all rungs of the property ladder, and so both buyers and sellers will now be eagerly awaiting confirmation from him and his party on how he decides to address this.”
One thing is for sure, a change in Stamp Duty is welcomed and overdue.
Estate Agency Reform
For years, there has been an abundance of issues surrounding the regulation of the estate agency market. Flambard Williams was asked by the Rt Honourable David Curry to write a piece for the parliamentary review (read this in full here) In this, we stated the need for Estate Agency regulation. We cited that the fact the stock market is one of the most regulated market places in the UK and is worth circa £4tn but the UK property market is not regulated and worth £7tn is an absurdity.
The Rental Market
Previous attempts at introducing a ‘rental standard’ for London when Boris was mayor were relatively unsuccessful. Boris promised a blue badge ‘kitemark’ for landlords and rental homes and introduced the London Rental Standard. Both were partly voluntary and made little impact, which many could blame on his past position in hopes of a more deliberate change going forward, but some aren’t convinced.
One position he has been clear on, however, is his attitude to rent controls – which he has said will only ‘deter investors at a time when more, not less, investment is needed’ – a view shared by the RLA. Boris even stated, “We need to expand the supply of private rented accommodation in London and we need to encourage investors to help us build hundreds of thousands more homes in London, many of them for private rent as well as for affordable rent.” So what does this mean going forward? Well, one thing is for sure, although there are initial fears and concerns he needs to conquer if the rental market becomes even slightly boosted in the capital this could kick start a new beginning for the property market and the UK post-Brexit.
Overall, we would like to remain positive and feel that after the last few years of uncertainty and negative thinking, we hope that our new Prime Minister can do his part to bring the country together and understand that there are major divided views which need to be listened to. To do this, we feel that we have to ‘let go’ of our previous opinions of the once-Mayor of London, and look forward to these plans coming into fruition, to make the property market stronger than ever.
For more information, or to speak to one of our property specialists about any of the points aforementioned, please do get in touch.