Two more years of government pain for the industry

My apologies if this causes you to break your Easter egg with a little too much aggression, but I reckon the industry has another two years of pain to endure from this government.

We’ve had Right To Rent, stamp duty reform followed by the stamp duty surcharge, phased reductions in mortgage interest tax relief for landlords, the end of the Wear & Tear allowance, chunky fines for rogue landlords, new money laundering regulations on the way and of course a letting agency fee ban for England... but it’s not over yet, I believe.

I don’t like that thought either, so please don’t blame the messenger - or, in this case, the person who thinks he knows what’s going to happen. But the reason why my view is pessimistic can be summed up in one word: Politics.

This Easter weekend sees the official start of the May local election campaigns. Despite being in government and pursuing an austerity programme with sharp cuts in council funding, all indicators suggest the Conservatives will do well. The Liberal Democrats may make progress, too, while Labour and UKIP will fare less well - possibly far, far less well than might have been expected mid-way during a government and with Brexit underway.

So the Conservatives are likely to come out of the May local polls completely unscathed and with a spring in their step - for now at least.

What happens next may be critical. If Labour remains faithful to Jeremy Corbyn despite a poor showing, the Conservatives may well believe they have two years ‘free run’ - taking them to spring 2019 - before keeping their heads down before the 2020 General Election.

During that two years’ free run they can, within reason, continue to harden support for the Conservatives and further demoralise Labour in particular, by picking on easy targets for more populist policies that will appeal to people outside the traditional Tory heartlands.

Estate and letting agents are just two of those easy targets; house builders are targets, too; and so, of course, are landlords. 

It doesn’t particularly matter that, historically, these groups have been ‘natural supporters’ of the Conservatives. After all, what are those groups going to do in 2020 - suggest voting for a Corbyn-led Labour party? I think not.

So the next two years may be as active as the past two in terms of anti-industry measures.

Expect the letting agents’ fee ban to be full-blooded (every indication is that this will be the case); expect landlords who circumnavigate the mortgage interest tax relief change by setting up companies to be ‘caught’ by an alternative measure introduced at the next Budget in November; expect controls over foreign ownership of properties; and expect no large scale reversal of the high-end stamp duty which central London agents abhor.

Of course, there is an alternative scenario.

Labour does badly next month, ditches Corbyn and moves to get a more effective leader who may give the Conservatives a run for their money by 2020. However, given the make-up of the party membership now, any replacement for Corbyn is likely to be in his mould - and so the odds are stacked against this tempering the government’s populist rampage.

By 2019, of course, Brexit will be over - well, maybe - and minds will be focussed on the following year’s General Election. 

Theresa May will be more likely by that time to want to win back the vocal support of those traditional backers (the estate and letting agents, the landlords and the house builders) so expect a more benevolent period with a few policy give-aways here and there.

That’s two years away, though. Until then there may be a rough ride for the industry. 

Sorry to be the carrier of bad news. Make the most of that Easter egg....

*Editor of Estate Agent Today and Letting Agent Today, Graham can be found tweeting all things property @PropertyJourn