What now for the property market as Boris Johnson takes over as PM?
This article is taken from Estate Agent Today dated 23rd July 2019. Should you wish to read the whole article please go to the link : - below and at the bottom of the page
Our own industry’s upheaval over recent years has been no less dramatic than the turmoil at Westminster.
The political earthquake has seen Boris Johnson become Conservative leader: what will this mean for our industry when he takes over the reins as Prime Minister tomorrow?
Johnson made housing a central plank of his policies when London Mayor and won some praise for his housebuilding record in the capital; then, during this summer’s leadership campaign, he made much play of slashing stamp duty and possibly even shifting it from buyers to sellers.
He remains an unknown quantity, however, on many of the biggest challenges facing the industry: the regulation of agents, the scrapping of Section 21, how we can improve the house buying process and so on and on.
We’ve asked a panel of leading industry experts to give their views on what we might expect from a Boris Johnson premiership and from the new housing minister, the 18th in little over two decades.
We send our thanks to our experts for contributing and we hope you’ll leave your own predictions and comments too. One thing’s for sure - it’s all change, yet again…
Lisa Simon, head of residential at Carter Jonas:
Boris Johnson’s proposed reforms could inject some life and much needed momentum back into the property market. Brexit has continued to be something of a grey cloud that has loomed over the top end of the market for nigh-on three years now and it remains the driving force behind instability in the market, particularly in Prime Central London.
The thought of Britain departing the European Union without a deal has been an ongoing concern amongst our clients. That said, one eventuality that could leave the prime pockets of the market feeling more unsettled is the potential of Number 10 opening its doors to a Corbyn government.
Without being able to rule out the possibility of a general election – and thus a Labour administration – speculation alone has already begun to stunt the top end of the London market, with a small handful of clients deeming the risk too high at this moment in time.
Other promises from Johnson around the relief of onerous taxes must also be seen as a potentially positive move for the market – but this all hinges on whether or not the Conservatives can hold their position as the leader and prevail against the opposition in the event of a general election.
Trevor Abrahmsohn, managing director of Glentree International:
The present draconian stamp duty levels, particularly at the higher rate, are distorting the market and deterring potential buyers from ‘taking the plunge’. This has caused a drop in transactions of up to 60% and a loss to the Treasury of over £1 billion per annum.
There has been a premature recession, particularly in the capital, and the sooner that Johnson and his new Chancellor can reduce this tax the better.
Thinking innovatively, perhaps at the same time, stamp duty could be split between buyer and seller that in aggregate could have the galvanising effect that is most needed.
Failing to deliver a form of Brexit will be an unmitigated disaster and could be the poisoned chalice that Mr. Johnson fears so much and which potentially could make his tenure at Number Ten the shortest on record.
His entire rhetoric has been based on delivering Brexit or pursuing a no deal Brexit and the political undertakers will be waiting for his corpse if he does neither. Quite apart from anything else, he needs a mandate from the country, which he will only achieve via an election and with the Brexit Party in the ascendancy, the Tory vote will be split, unless he can deliver Brexit beforehand.
Boris will not be the first or last populist trying to spread good cheer and frankly, we badly need this particularly when you listen to the likes of well-known miseries Chancellor Hammond and Mark Carney, who are quick to write off this country’s prospects.
Neil Cobbold, chief operating officer of PayProp:
The buy-to-let market has stalled due to tax changes like the stamp duty surcharge and cuts to mortgage tax relief under Section 24. If Boris Johnson is able to remove all stamp duty and land tax surcharges for landlords, he could reinvigorate the sector – especially in areas with high-value homes where we’re not seeing a lot of movement.
Although this could help the market, a pledge to cut stamp duty alone won’t be enough to counter-act losses from Section 24 and bring the leveraged buyer back into the market.
However, the emotional impact of some good news from a new government would have a positive impact on the sector.
By now, the cost of Brexit has been priced into the market. We’ve already gone through enough periods of thinking we were going to leave, so the industry will be indifferent to the October deadline, adopting the attitude that either something will happen or it won’t – it’s out of their control.
The only parts of the country that could be affected are London and other immigration hotspots, especially if the government wins its Right to Rent appeal in the High Court.
Boris can be a divisive figure, so I don’t think he will have an overwhelming influence, one way or the other. More important will be any positive changes in the economy, who he appoints as the Secretary of State for Housing, Communities and Local Government, and how actively the person engages with the industry.
Something that would help the industry would be if he overturned Section 24, but it’s doubtful that will happen. As we now have such a large private rented sector, it’s too much money for the Treasury to give up.
Ed Mead, founder and chief executive of Viewber:
BoJo has the potential to affect the housing market in a way few Prime Ministers have since Maggie. He works with sentiment and particularly in London, that’s a major driver.
Brexit is baked in to most people’s negativity - anything that unblocks the log jam will be a positive.
Camilla Dell, managing director of Black Brick:
A move to reverse the stamp duty increases put in place by George Osborne, when the top rate increased from 7% to 12%, would be very good news, particularly for the London market which has been suffering from an onslaught of tax hikes on property since the end of 2014.
We would welcome a review of current property taxation, particularly the 3% surcharge and proposed 1% additional charge on foreign buyers, which has had the effect of pouring glue into the market and resulting in a dramatic fall in the number of transactions happening on an annual basis.
Furthermore, a move to cut stamp duty on homes below £500,000 would clearly benefit the first-time buyer market. In our opinion, this should only apply to first-time buyers and not investors.
However, the market needs to treat promises made by Boris Johnson with real caution.
this is NOT the full article; read more from industry heads..... https://www.estateagenttoday.co.uk/breaking-news/2019/7/what-now-for-the-agency-industry-as-boris-johnson-takes-over