As the celebrations subside from Monday’s hugely anticipated Downing Street exit, thoughts must turn to what’s next and particularly for the UK economy and the housing market.
You may not want to know what I think, but here it is anyway.
The UK economy is not in a good place with inflation, public borrowing and unemployment rising and a general feeling that the Government are either too ideological, or just lack the courage to make the bold decisions that are needed on such things as welfare spending, defence, toning down Net Zero and so on.
Yet the mainstream property market has been somewhat insulated from this wider economic fall-out with transactions and values holding their own in most places – except Prime markets.
The big question now is, what does an Andy Burnham Premiership look like for those of you still reading this?
What shape will his policy agenda take and how will the markets and the economy react?
What does the King of the North stand for? What will he announce (and will he stick to what he says he’s going to do, unlike many of his predecessors)?
Burnham is of the so-called ‘soft left’. A bit of nationalisation, better public transport, investment in public infrastructure, an acknowledgement that promoting business is important – and house building. Unsurprisingly though, this will be aimed at social housing and probably resurrecting council housing specifically. Great for construction companies, less exciting for estate agents and mortgage brokers.
He’s also said that he will stick to Rach’s fiscal rules and, importantly, her promises not to raise income tax or VAT.
So for the sixth time in ten years, I aim to give the incoming PM the benefit of the doubt. Indeed the City looks as though it is doing the same. In the last week, the UK Ten Year Gilt as a measure of the health of the economy is at its lowest since March, the FTSE 250 is largely unchanged from a month ago, and the Pound is stable.
Will the markets respond well to Burnhamonomics? If they are convinced that his future plans are costed and represent a balanced budget, then we can all breathe a sigh of relief and he may indeed be the new Messiah, politically speaking.
But if the Square Mile are spooked by huge, unsustainable borrowing commitments and Britain being seen as ‘closed for business’ then Liz Truss’s exploits will resemble a momentary fiscal glitch by comparison.
Oh, and before I go, here’s the real gravy of this article… I have it on good authority that Prime minister Burnham will reform property taxes from the current council tax and stamp duty approach to a simpler albeit no doubt controversial annual property tax, said to be at 0.48% of value. This will be bad for those owning a home over c.£700,000 who will then be worse off versus their current council bill. But extremely beneficial to the UK housing market in that removing SDLT as a transaction tax will be the single biggest boost to buyer demand since Help to Buy was introduced.
Fun fact: Annual house prices increased more under Labour’s Tony Blair than during Conservative Margaret Thatcher’s reign.
Russell Quirk is co-founder of property public relations agency ProperPR.
Read the orginal article: https://propertyindustryeye.com/opinion-burnhams-blairite-house-price-bounce/
