With the general election just one week away, everything is on the line for Theresa May. A ‘strong and stable’ Conservative campaign has become anything but, after the fallout from the Conservative manifesto led to a tightening of the race that will have made Downing Street very uncomfortable, especially after several largely unpredicted election results in recent years (think Cameron, Brexit, Trump). Social care, education, and of course Brexit have been amongst the big election issues, but what impacts can the property industry expect? Redwood surveys the scene.

Despite the shift in the polls since the so-called ‘dementia tax’ backlash, the Conservatives remain favourites to retain power after the polls close. The near-total disappearance of UKIP in last month’s local elections and the lacklustre Lib Dem campaign means this general election could see the highest proportion of votes for the two main parties in decades. This should bode well for a Conservative Party that looks unlikely to be deserted by older voters, who are expected to turn out in force.

Homes and dry?

The Conservative manifesto in part serves as a testament to the party’s more interventionist approach and there are few better examples of this than the proposals for the housing market, with the traditional party of business happy to criticise and threaten to take action against developers for building out slowly.

The White Paper on housing rightly identified that the housing market suffers from chronic undersupply of the homes that people need, but was light on policy solutions. The Conservative manifesto reiterates the party’s commitment to deliver a million homes by 2020 and half-a-million more by the end of 2022. It will be interesting to see how a Government with a fresh mandate responds to the consultation on the White Paper, which closed earlier this month.

Labour also pledges a million new homes, including 100,000 council and social homes per year by the end of the next Parliament, while the Lib Dems are the most ambitious, suggesting 300,000 homes a year.

Local authorities will be key to delivering these numbers, and all parties propose to give councils powers to penalise developers who do not implement planning permissions, in addition to further fund-raising powers. Labour’s proposal for a government department solely focused on housing catches the eye, as does the Lib Dem Help to Rent scheme, a proposed government-backed loan to help under-30s get a rental deposit together. The Lib Dems again suggest ‘Rent to Own’, which would see rent payments contributing to the eventual purchase of homes.

A coalition on Green Belt

Despite the need for more housing, the major parties are exceptionally cautious on the Green Belt – the Conservative and Labour manifestos talk of a brownfield-first approach, while the Lib Dems coyly talk about increasing accessible green space. These approaches will directly affect how many houses can be built, as Labour and the Lib Dems champion a new generation of Garden Cities and New Towns, and the Conservatives focus on rebalancing housing growth away from the South East (and conveniently, those leafy green constituencies many ministers are hoping to retain). Furthermore, the issue remains that new houses in areas such as the North West will do little to address problems in London.

Down to business rates

While the Conservative Party would cut Corporation Tax to 17% (the lowest rate of any developed economy) by 2020, the question of how to reform business rates remains open. Where high streets continue to struggle – despite the best efforts of businesses and local authorities – many question whether business rates levied on them but not their online equivalents is sustainable. With Labour the only major party committing to immediate reforms of the business rates system, other parties face a tough sell to frustrated business owners.

Tory triumph come what may?

Tragic events in Manchester led to a pause in campaigning last week, and seem to have increased the Conservatives’ determination to identify the Labour leadership with the IRA, a message which has not so far resonated. The Conservative manifesto (dubbed ‘the most disastrous manifesto in recent history’ by George Osborne’s London Evening Standard), and subsequent U-turn, look to have put paid to chances of an historic landslide for Team May. She has proved willing to pilfer popular policies from previous Labour manifestos, and it will be interesting to see if an emboldened Prime Minister attempts any more political cross-dressing after the election. The forthcoming Queen’s Speech on 19 June should therefore prove particularly interesting.

At Redwood, we’ll be following the campaigns closely through the final stretch and the new Parliament beyond, and will keep you informed.