The Labour Party’s 1983 manifesto may no longer be the longest suicide note in history. Boris Johnson’s unequivocal message to get Brexit done drove a wrecking ball through Labour’s Red Wall, clearing the way for the UK’s departure from the EU in January.
Overnight, the tectonic plates of British politics have shifted. But will this result in more stable ground for housebuilders to build on? Overall, the industry has welcomed an end to the political deadlock which has corroded construction output and frozen the housing market.
“It’s fantastic to see the Conservatives achieve a majority, and the party’s re-election is good news for the housing industry with some strong policies in place,” said Bruce Burkitt, Founder at Property Experts. “The Conservatives are also the only party who have highlighted investing in infrastructure to support new homes as a key point.
“It’s also great to see that they are prioritising key workers and other local buyers being able to buy within their local area with a proposed 30% discount on new homes. I think theirs are the policies which will work best for our country and I hope they come to fruition.”
At the stroke of 10pm, the pound soared as the exit polls foretold Labour’s worst defeat since 1935. While the party’s supporters watched in horror as Labour’s heartland fell to the Conservatives, many property developers felt heartened as the fog of uncertainty began to lift.
“Of all the possible outcomes to come from the yesterday’s election, a Conservative majority provides the most clarity,” Jamie Johnson, CEO of FJP Investment, said. “Their position on Brexit is clear and now we wait for Boris Johnson’s EU Withdrawal Agreement to once again be voted on in parliament.
“Importantly, I hope the government uses this victory to start making progress on national issues that have been ignored, such as the property market.”
Despite Labour tightening its grip on London, many property developers in the capital seem relieved to have escaped Corbyn’s clutches.
“The London property market is breathing a sigh of relief this morning as a Corbyn government would have likely decimated the prime sector overnight,” said Edward Heaton, founder and managing partner of Heaton & Partners. “Many of our wealthiest clients who had put in place contingency plans for a Labour majority, are now likely to reinvigorate their purchasing plans and start buying.
“I expect activity to pick up immediately and this is to be reflected in a steady increase in house prices in the coming months. This morning we have already seen the pound hit the highest level against the US dollar since June. After a period of deadlock, this gives buyers and sellers real hope of a buoyant market.”
London Square is already planning to double the size of its development pipeline to £2.6bn and scale up production to 1,000 new homes a year on the back of the decisive election result.
“This is great news,” said Adam Lawrence, Chief Executive, London Square. “At last we have certainty with a majority Government in power. This is a time for great optimism, and we anticipate a post-Brexit bounce in the market once the uncertainty of the past three years has lifted. We will now be pushing ahead for significant investment in the land market off the back of this result the next two years, ready for the pent-up demand that will most certainly emerge.”
Developers also believe foreign investors will revel in a Tory majority. Juwai.com Executive Chairman Georg Chmiel said: “Many of the Chinese buyers we work with are reassured by the Tory win. Those foreign investors who watch UK politics believe the Conservative victory reaffirms the UK as a safe place to invest and an appealing place to live.
“Yes, the Conservative government has been chaotic and plagued by scandals, but it seems to stand for business-as-usual in many respects.”
It seems that property professionals are optimistic about the new normal awaiting them under the debris of the Red Wall. For many, fear itself has been driven out by a decisive result.
