Wed 07 Sep 2022
Anne Butcher, Managing Director
UPDATE 23/09/2022: Read the latest news on the anticipated reduction in Stamp Duty tax and the effect it will have on the housing market.
Truss won the leadership race against Rishi Sunak by a large margin. She has served in six ministerial positions under three prime ministers, including 11 months as foreign minister. Even though she has held many high-profile government jobs, where she stands on her policies remain a mystery. For example, she was known for supporting the Britain Stronger in Europe campaign in the 2016 referendum, which wanted the UK to stay in the European Union. After the vote, however, she switched to supporting Brexit.
During the race for leadership, Truss stood on the same ground as Sunak when it came to housing policy. He promised to encourage building in brownfield areas and make the process easier.
But she seems to be at odds with the Conservative governments that came before her. She has promised to get rid of "Whitehall-inspired Stalinist housing targets" in favour of tax cuts and less regulation for businesses to cut down on building delays. This would mean that the long-held government goal of building 300,000 houses a year would be scrapped.
Again, this seems to go against what she said before about making changes. She said in 2018 that the government should build more homes in rural areas. In 2019, she said, "We do have to be ready to take on those who don't want a house built in the field next to them."
The energy crisis should be her top priority, and she needs to find a way to fix it. But in the coming weeks (or at least long enough for a few more policy changes and a few new Housing Ministers), the real estate industry will look to her for answers.
As expected, the news was quickly picked up by the business world. Here is what they have to say.
James Tucker, the founder and CEO of Twenty7Tec, says, "One thing I hope our new PM gets right is to stop treating the housing and mortgage industries as if they have nothing to do with each other. MHCLG and Treasury need to think more about how they work together as a whole. There is a lot of talk about building homes, but even the Land Registry's recent report on buying homes barely mentions the thing that makes the market work: mortgages. In my opinion, the Government needs a fully working mortgage market to keep providing a healthy and thriving housing market that adds to the wealth of the country. We'd love to have clear promises about, for example, how to help First-Time Buyers. If first-time buyers can't get into the market, the rest of the chain might depend too much on Buy-to-let landlords at the bottom."
Simon Cox, the Managing Director of Walter Cooper, says, "When it comes to housing, planning problems need to be one of the next PM's top priorities. This will mean making some unpopular decisions." Truss needs to stop pandering to the NIMBY crowd and publicly back away from what other Conservative MPs, like Michael Gove, have said in the past about the so-called "cartel," or she risks turning off the housebuilding community for good. But since a general election is probably coming up soon, I don't think these hard decisions will be made any time soon. Housing is a big part of what keeps the economy going, and this will be more important than ever as we head toward a predicted recession. I'd ask the new PM to help promote an open for housebuilding agenda by working with people in the industry. Truss may have said she would remove planning restrictions to help build more homes, but since the government has given up on its goal of building 300,000 homes a year, will her so-called "investment zones" ever come to fruition? I don't know, but the fact is that if prices are going to keep going up because there aren't enough houses being built, something needs to be done to increase the number of houses being built in this country. Otherwise, only a few people will be able to own their own homes."
Nick Leeming, Chairman of Jackson-Stops, says, "Stability is key for a healthy economy and housing market. I hope that Truss will put an end to the Housing Minister merry-go-round we've seen over the last ten years. There is still a difference between how many homes are available and how many people want to buy or rent them, so we are looking forward to a more balanced market. To do this, we need policies that are always the same."
Image Courtesy of The Harold.