Housing Under Rishi - don’t expect much (but be grateful for that)

And…breathe.

For a while back there, the only certainty for the housing market was uncertainty.

That isn’t to say the election of Rishi Sunak as Prime Minister is the solution to all our problems - far from it. But suddenly there seems a stronger chance that the coming two years, for both the housing market and the wider economy, will be quietly functional rather than wildly experimental.

Indeed, it seems as if we have reset about six years to the Cameron style of managerial government. Gone is the day-to-day desperation that characterised the Theresa May government, the narcissistic incompetence personified by Boris Johnson, and the swivel-eyed fundamentalism that Liz Truss wishes she had been skilful enough to execute.

Instead it’s already clear that Sunak is going to be a Tory interventionist, perhaps stronger on free market rhetoric than action. What will that mean for key housing policies between now and the next General Election in two years time?

Planning

Sunak has quickly spoken out to change the Liz Truss messages on fracking (she was for, he’s against) and brownfield development (he’s in favour, she edged towards redrawing Green Belt boundaries). It seems likely that there will be a return to a NIMBY-lite approach to planning, away from what Truss hinted would be a less consensual approach.

Boris Johnson upset his natural supporters by proposing large-scale planning reforms to make it easier to build…Sunak will not repeat this. Ironically, of course, that may well mean a continuation of Britain’s decades-long inability to meet housing targets and provide supply to match demand for new homes.

House Building

Very little has been said by Sunak on this, even during the summer-long leadership contest. But here’s what we know - he dislikes top-down housing targets, gave off-the-cuff criticisms to developers’ unfair land-banking, and made the usual nods in favour of modular construction and using SME builders. Most significantly, perhaps, he has suggested that Tory manifesto commitment of 300,000 new homes a year may be simply unobtainable.

Rental Reform

For 48 hours, Truss clumsily suggested that the pro-tenant mood music of recent reforms might be at an end. This served only to provoke an outrage from the usual charities and pressure groups, forcing her to U-turn. Sunak has made clear by reinstating Michael Gove as Housing Secretary that the Renters Reform Bill is on its way, complete with measures most analysts agree are detrimental to landlords in particular and rental housing supply in general.

But the Bill may not be law by the next election so expect the Section 21 issue to be taken out of the Bill and dealt with separately, and more speedily. S21 will be scrapped sometime next year.

Rent Freezes

These have become the political flavour of the month amongst many in Scotland (where they now operate) and Wales (where they were floated but rejected). Labour and the Lib Dems are raising the temperature on this but one of Sunak’s closest friends and allies in the Commons is Kevin Hollinrake MP (ex-chairman of Hunters) and he has already spoken out strongly against freezes. Don’t expect Sunak to go down this road.

Green Measures

There are so many of these - from planning provisions that mean a bat roost can halt housebuilding, to stricter EPCs for the private rental sector - that it is difficult to make a blanket assessment of where a Sunak government is likely to stand. But here are two interesting landmark decisions - firstly, in 2016, Sunak voted against lowering the maximum rate of carbon dioxide emissions in new homes, and secondly, just this month, he demoted climate change minister Alok Sharma to a non-Cabinet role.

He’s also been non-committal (so far) on whether green levies will survive intact when the next Fiscal Statement is delivered on November 19. At the very least there is likely to be less enthusiasm for Green Measures that add to the cost of living crisis.

Social Housing

Sunak talks the talk of owner-occupation, and has recently insisted that younger generations would only support capitalism if they had a bigger change of purchasing their own chunk of capital - a home. Yet as Chancellor he announced a £12 billion affordable homes programme - one of the biggest investments in the sector for some years.

If Gove can persuade Sunak to join up his housing policies, the new PM will see that pushing landlords out of buy to let (as the rental reforms will do) should be matched by an expansion of social house building.

Cladding and Building Safety

Once again, the return of Michael Gove means it is surely likely that the progress he made on this controversial area until he left government in the summer will now be picked up again. After faltering missteps on the subject by former Housing Secretary Robert Jenrick, Gove engineered a package of taxes from developers and public funding to effectively defuse the cladding crisis. That was done with Sunak’s agreement as Chancellor - expert more of the same as this issue becomes less volatile in the next two years.

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So where does this leave the housing portfolio of the new Sunak government? Frankly, it’s a bit of a mixed bag especially as so many housing policies are potentially controversial in the eyes of Tory voters - and so won’t be raised between now and the next election.

What is different, however - and better than the recent past - is the mood music. It’s clear that even if the next two years are going to be quiet, avoiding upsetting established vested interests, at least the people in charge appear to know what they are doing. There is a degree of competence and public service which has been lacking, certainly since 2019.

We must aim for much, much more. But compared to where we have been recently, even just a few weeks ago, we now appear to be in a much better place to face the recession and financial storms that lie ahead.

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