Over the next few months, three seismic events are set to reshape the political landscape. Internationally, Britain will decide its place in the EU on June 23rd, on a national level the Chancellor will deliver the next Budget on March 16th and closer to home in London we will decide our new Mayor in May. Here we set out a quick round up on the lay of the land for all three and the likely impact for the real estate industry.
As ever before a Budget, rumours abound. The Chancellor, George Osborne has hinted at further cuts to ensure he meets his Manifesto promise of a budget surplus by 2020.
In this Budget, Osborne is walking one of the most politically precious paths of his career. Trip up and he risks causing outrage among Tory MP’s if his reforms land in their constituencies in the midst of the EU referendum campaign. He has been warned by the prime minister to “tread very carefully”, as some pro-Brexit MP’s may try to cause trouble by attacking Osborne whilst he is busy rallying the In vote.
Should we stay or should we go?
The Conservative Party is split over Brexit. An old wound, which has been inflamed by the rise of outsiders like UKIP. At last count roughly half Conservative MPs would support leaving the EU. Their ranks include a number of high profile MPs such as Secretary of State for Justice Michael Gove and Mayor of London Boris Johnson, as well as the Conservative’s Mayoral Candidate Zac Goldsmith.
Whilst politicians and business leaders have been willing to nail their colours to the mast and declare allegiance to either the Remain or Leave camps, the reality is that no one really knows what will happen if the United Kingdom sails from Europe’s shores and starts the ‘Brexit’ process. It will be this uncertainty which, some claim, could cause genuine damage to the markets, international investment and the property industry.
Senior members of the business community have argued that a Brexit could disrupt London’s position as a global financial centre, whilst others have warned of the dangers to London’s prime property market if international investment is stifled. Furthermore, in a Brexit scenario house price demand could fall because of reduced demand from immigration and the impact on the UK’s status as a financial hub.
#BackZac2016 Vs #SadiqKhan
London property has also been top of the agenda in the race to elect a new Mayor of London. Zac Goldsmith puts “more homes” top of his election promises, whilst Sadiq Khan has called the election on May 5th “a referendum on housing”. Speaking at the recent LandAid Debate each candidate promised to deliver 50,000 homes a year if they became Mayor. Khan has attacked Goldsmith and the Government’s policy towards affordable housing, whilst Goldsmith hit back at Khan’s proposals to freeze rail fairs, saying, “If we don’t improve the network, we won’t solve the housing crisis”. Campaign soundbites aside, the division between the candidates masks a form of unity, all agree that something must be done about London’s housing crisis.
The coming months will reshape the political landscape, in London and in the EU. Redwood’s team will be keeping close tabs on every aspect of this and we will be providing tailored updates for our clients as well as hosting a series of events to help the property industry navigate these challenging waters.