This time last week the UK was on a knife edge with rumours that Labour party support was increasing, the Conservative party was under pressure and we were likely moving towards a hung Parliament. As it happens, Boris Johnson managed to secure a very healthy majority in the House of Commons giving him enough wiggle room to negotiate his own Brexit deal without too much intervention from other political parties. However, private landlords will be relieved that the threat from the Labour left has been removed!
There were serious concerns that a Labour government, in an informal/formal coalition with the SNP, would lead to rent controls across the UK. There is still a good chance these could be introduced in London but the threat to the rest of the UK was real and frightening for many landlords. While some of the Labour Party are still arguing that they “won the debate” on rent controls, this bluster is not backed up by evidence.
Right to buy
There was also talk of a controversial right to buy scheme in the private sector which would give tenants the right to buy their private sector property at a discount to market value. While many believed that this scheme was never going to happen, it received significant discussion time amongst Labour party supporters. It is a little ironic because many blame the right to buy scheme of the 1980s, involving council properties, as the start of the boom time in property prices.
There is no doubt that private landlords felt under attack in the final few months of Theresa May’s government. We saw an array of new regulations increasing the protection of private property tenants often to the detriment of landlords. There was a general consensus amongst property investors that this protection had gone too far and was eroding the already brittle profit margins of many private landlords. While there is no sign as yet of Boris Johnson repealing any of these recent regulations, thankfully there is no sign of him introducing anymore!
Whether looking at the Conservative party immigration policy, which would revolve around a points-based system, or the free for all sought by the Labour party, net immigration into the UK was always going to rise. As a consequence, demand for private sector housing will continue to strengthen for the foreseeable future. Whether this will be enough to tempt previous buy to let investors back into the marketplace remains to be seen.
New build properties
Brexit, the NHS and housing were three central subjects in the recent election. The Conservative party has committed itself to building 1 million new properties in the UK many of which will be in the private sector. This jump in newbuilds will be achieved with a significant overhaul of the planning permission system and investment in construction. While the Labour Party was skewed towards social housing in its new build promises, the Conservatives are skewed towards the private sector. Will Boris Johnson be able to deliver where so many governments in the past have failed?
Private landlords in the UK will be breathing a sigh of relief in the aftermath of last week’s general election and the landslide victory for Boris Johnson and the Conservative party. There was a serious threat that a Labour government would introduce an array of far left socialist policies, handing control to tenants and reducing the returns of private landlords. So, now Boris Johnson has a healthy majority in the House of Commons, how will he assist property investors in the short, medium and longer term?