Larry the cat will soon share his 10 Downing Street home with our fifth prime minister in four years.
Lem Bingley PW editor
While Larry might shrug off the change in his usual aloof fashion, the rest of us can only wonder and fret.
By happenstance, freshly amalgamated industry body Real Estate:UK (RE:UK) held its inaugural event on the evening of the Makerfield by-election, which saw Andy Burnham return to the Commons with a massive majority. A show of hands at the event predicted the electoral outcome by a similarly broad margin. Most, no doubt, expected Burnham to continue on to No 10, even though Sir Keir Starmer’s resignation was still speculation at that point.
Speaking at the event, departing British Property Federation (BPF) chief Melanie Leech, armed with a glass of white wine, said she was “more relaxed than you might think” about a new PM, “because the issues don’t go away, solutions don’t change”.
She explained: “Ultimately, this government has a series of commitments it needs to deliver and [our sector] is fundamental to delivering them.” She listed housebuilding at volume, urban regeneration and basic economic growth.
While Burnham has said he thinks land is under-taxed, he has not (yet) endorsed a proportional property tax
“The UK is a really strong market, it’s a really attractive market and it’s got a slightly tarnished reputation for political stability,” she added. “Let’s get through whatever the next few weeks bring, and let’s get back to a period of more stability, more certainty, so we can talk to investors and we can plan.”
Jessica Hardman, chief executive and co-founder of Aboria Capital and RE:UK board member, noted that investors despise “unprepared legislation of the sort we saw with upward-only rent reviews”. She also cited the prospect of rent controls, with “noises made and then withdrawn”. She observed: “That’s really unhelpful as what makes investors very nervous is policy rapidly changing. The UK generally isn’t a country that has had that.”
Burnham’s leadership bid has barely begun and there is already speculation about bombshell new policies, most notably the prospect of a proportional property tax (PPT).
Pushed by lobby group Fairer Share, PPT would replace council tax and stamp duty with an annual levy on the value of domestic property. Envisaged as fiscally neutral, it would slash billions from tax bills outside London while raising them by the same billions inside London. It’s easy to imagine this might appeal to the ‘King of the North’. It’s also easy to imagine a tsunami of unintended consequences.
While Burnham has said he thinks land is under-taxed, he has not (yet) endorsed PPT.
“There are other, more inventive ways of using tax to encourage the market to move,” observed interim RE:UK chair Anne Breen, global head of real estate at Aberdeen Investments. She gave greater tax relief on seed funding for early-stage innovators as an example, predicting this would attract capital and fuel growth simply by waiving a tax unlikely to be paid anyway without the incentive. “It could unlock the market substantially,” she said.
RE:UK was formed this year to raise the volume of the industry’s voice in Whitehall. Let’s hope our next PM is listening.
