Mayday! Housebuilders face more uncertainty

The British people have spoken: they can’t decide. It seems the choice between a hard right and a hard left was simply too hard to make. However, does this mean hard times for the housebuilding industry?

For the immediate future, the only promise a hung parliament can deliver is more political and economic uncertainty. “No business likes uncertainty and housebuilders like it least of all,” said Greg Hill, Deputy Chief Executive at Hill. “This hung parliament and the horse-trading that will take place over housing policy to get a coalition in place means that many housebuilders will hit the pause button on their investment decisions.

“This is the exact wrong moment for a construction slow down. The country needs new homes desperately. We hope that the negotiations are concluded rapidly so that the new government is in place and ready to work with the sector to go out and get building.”

WHERE DO WE GO FROM HERE?

So what happens now? After Jeremy Corbyn has finished gloating and the calls for Theresa May to be banished from Number 10 die down, an agreement will have to be reached. Corbyn is already drawing up plans for a minority government while May is off to see the Queen to ask permission to form a political party with the DUP.

Martin Bikhit, MD of Kay & Co, said, “Whether we end up with a minority Labour government, or with a formal coalition, as in 2015, will depend on the various negotiations that will take place in the next few days. Cool heads will be needed and a period of political uncertainty – hopefully, not prolonged – seems inevitable.”

WHAT COULD HAPPEN

There are, however, a few certainties we can cling to. We’ve glossed over the manifestos and have an idea about which policies might be used as bargaining chips. Already, Jeremy Corbyn is calling for the rights of EU citizens living in the UK to be guaranteed – an act which would bring some cheer to housebuilders.

“Delivering these proposals should not be overshadowed by the impact of Brexit,” said Hill. “As part of the negotiations the new government must act immediately to keep the flow of talent from the Continent open. We will not be able to deliver 1 million or more homes by 2022 if we don’t have a sufficient volume of skilled builders to construct them.”

All three front-running parties put housing close to the hearts of their manifestos. The Conservatives’ manifesto committed them to building 1.5 million new homes by 2022, while the Labour Party has pledged a million new homes, half of which will be social housing. Labour has also promised to give locals priority over people from outside the area when it comes to buying new homes.

“With Labour in the driving seat, the housing policies in their manifesto give a broad indication of the priorities likely to be pursued by an incoming government, while there may also be policies in the manifestos of the smaller parties – such as the Liberal Democrat promise of a Housing Investment Bank – that may enter into the political agenda,” said Bikhit.

BYE BYE BARWELL

Sadly, another fact is that we must say goodbye to Housing Minister Gavin Barwell, who became an election casualty when he was voted out of his seat in Croydon. “In addition to the prospect of Theresa May being forced out for grabbing humiliation from the jaws of victory, we will also see yet another Housing Minister in post by next week given that Gavin Barwell has just lost his Croydon Central seat,” said Founder and CEO of eMoov.co.uk, Russell Quirk. “That’ll be our 6th Housing Minister in almost as many years.”

“With Gavin Barwell gone, it will be interesting to see what happens to the long awaited Housing White Paper that disappeared from the scene since its publication in February,” added Nick Leeming, Jackson-Stops & Staff Chairman.

LET’S GET ON WITH IT

Wherever Britain goes from here, we can only hope the government picks a direction quickly to curtail months of further uncertainty. “What’s needed now is consistency rather than upheaval,” said Bjorn Howard, group CEO of Aster Group. “A government must be formed as quickly as possible so that we can continue to build on the progress made in recent years in supporting the housing and housebuilding sectors.

“Whatever the outcome, developers, housing associations and the government must acknowledge the importance of partnership working. Encouraging the sector to work more closely together is crucial to finding the solutions needed to alleviate the crisis right across the UK, not just in the big cities.”

The quicker there is a new normal, the quicker the industry can build on it. “The British people have spoken. Just when we were starting to work out what May-ism entailed, we will have to get used to Corbyn-ism,” said Bikhit.