Coming as no surprise to those who had been eagerly following the Conservative Party leadership contest, Boris Johnson was appointed the party’s new leader last week – and, in turn, the next Prime Minister of the UK.
Johnson’s future policy ambitions are paved with questions, particularly when it comes to understanding how he will deliver a Brexit withdrawal deal that wins the support of parliament. But aside from overarching uncertainties about Brexit, questions also remain about how he will approach the country’s internal dilemmas.
For one, stakeholders in the property industry will be awaiting his proposals to address the UK housing crisis; an issue that has endured now throughout many successive governments. Will Boris Johnson be the Prime Minister who turns this fortune around and offers a comprehensive solution to the crisis?
A snapshot of the housing crisis
In the most general terms, the housing crisis is a problem of supply and demand. Or, more specifically, a lack of supply to meet high demand for property. At present, it is estimated that the UK needs to deliver 300,000 new homes a year by the mid-2020s if we are to adequately meet the needs of the population.
But if we are to delve deeper into the problem, there are hidden obstacles that must also be addressed if Johnson hopes to offer effective solutions. After all, not all regions are characterised by the same trends; in some parts of the UK, the issue is not one of supply, but rather of distribution – too many properties are concentrated in the hands of the few. Meanwhile, in other parts of the UK, homes stand empty and derelict instead of being refurbished into suitable and affordable housing.
How will Boris Johnson address these problems?
The question then beckons – will the new Prime Minister be able to address these issues, and how will he go about doing so?
A look back at Johnson’s campaign offers a glimpse of what he has in store for the property market. Most notably, the newly-elected PM touted plans to radically transform the current stamp duty scheme by halving the tax levied on properties valued at over £500,000, while scrapping it altogether for homes below this benchmark.
The market has generally welcomed this news, particularly as it aims to support owner-occupiers and first-time buyers. Moreover, it could encourage a more even distribution of properties; by encouraging older people sitting on large properties to downsize, such a move would free up housing stock for prospective homebuyers.
Elsewhere, Boris Johnson has shown his support for creative measures that would enhance housing availability and affordability in areas beyond the remit of the capital. Under proposals by the think tank Policy Exchange, towns along popular commuter transport routes could see the delivery of 30,000 new homes. It is hoped that revitalising these areas could attract working professionals and improve their homeownership opportunities.
More recently, Johnson has also made promises to build a faster rail route between Leeds and Manchester, in a move that highlights not only the importance of connectivity in boosting the region’s economic standing, but also of his determination to support local property markets. By unleashing the economic potential of the North of England, there is hope that this investment attracts more investors and homebuyers into the region.
There is certainly scope for debate about the viability of these solutions, and whether they will ultimately come to fruition. However, Boris Johnson’s current stance leaves us in no doubt that the UK property market remains a policy priority, despite Brexit uncertainty.
Jamie Johnson is the CEO of FJP Investment