So, there we have it. The worst kept secret in British politics is now out in the open – Boris Johnson is the next Conservative Party leader and of course also becomes the country’s next Prime Minister.
From my desk, I can almost hear the calls from opposition parties for a quick General Election – I suspect we won’t get it by dint of Johnson calling it but I suspect that it still looms large on the Parliamentary agenda if he fails to come through a quick Vote of No Confidence. Indeed, by the time you read this, it may already have happened – anything seems possible in UK politics at the moment.
But, let’s believe that Johnson is going to be given some time by his Parliamentary colleagues and, away from the obvious and overwhelming priority of Brexit, where else might the new PM focus on, in order to perhaps give us an early flavour of what a Johnson government might wish to do.
Well, certainly from the soundings taken on the Conservative Party hustings, Johnson is keen on leading a rather interventionist government when it comes to the housing market. The major focus of that intervention appears to have been stamp duty, and alongside suggestions of cuts to stamp duty for properties valued under £500k and cuts to the highest threshold from 12% to 7%, we had a suggestion that he might even be willing to countenance a change of payment from buyer to seller.
Whether any of those proposals are quickly jettisoned or indeed, overwhelmed by the sheer political capital required to sort Brexit out, remains to be seen, but if he can last in the position, then we should all perhaps prepare for an early Budget, and it would be at such an event that these announcements would be made.
Given summer recess is now upon us, and the conference season takes up most of September, you might wonder whether any Budget could be put in place before the Brexit deadline of 31 October, or indeed, whether Johnson might wish to wait it a little longer.
Everything is so up in the air that it’s hard to predict just how this will all flow through the system, but I get the sense that when it comes to stamp duty cuts, the industry is very keen, and when it comes to fundamental changes to the system, the industry is less sure.
Clearly, the purchase market is not going to sniff at any measure which incentivises greater activity and given that we have been a market hugely reliant on remortgages over the past half a decade, it would be nice to see some positive action in this area. In areas like London, a cut to the higher threshold is also going to be warmly received, and should provide a welcome boost, while the fact any cut to stamp duty for properties below £500k would not just help first-timers but all home-purchasers, is also likely to deliver some benefit.
And yet, a part of me can’t help wondering if the uncertainty of Brexit might ensure that, what would normally be a positive for the housing market, is simply not taken up in the numbers we might all anticipate. There are far bigger factors at play here, not least around how a No Deal might be the final outcome, and the potential damage this could do to the overall economy.
The OBR forecasts for the economy in the face of a No Deal made pretty scary reading, and when you’re talking about recession, significant job losses, big drops in house prices, and a rise in the cost of living, you might well decide to hedge your bets. Whether that means not even looking to buy or sell, or simply being unwilling to countenance offers below the asking price, it probably results in the market continuing to play out as it is now, until we get greater certainty.
So, in a very true sense, we remain treading water – as both a nation and an industry. Clearly, some industry carrots have been put in front of our noses but the Parliamentary arithmetic might ensure nothing happens, while the whole situation could have changed drastically and dramatically by the time Johnson’s new Chancellor puts their first Budget together. I suspect, what we can all probably agree on, is that it’s likely to be a very bumpy ride.
Mark Snape is managing director of Broker Conveyancing