The votes have been counted, and the results are in. Here, we give our key takeaways from this morning’s election results and set out what this means for the real estate sector.
The New Political Landscape
The voters are never wrong as wizened politicians will always remind you.
This time they spoke with a clarity which has not been heard for quite a while. Boris Johnson and the Conservatives have a won a decisive majority of 76, the largest majority for any Conservative Government since the heyday of Margaret Thatcher in the 1980s. The Conservatives received 43.6% of the vote, with Labour on 32.2% and the Lib Dems on 11.5%. Translated into seats the Tories have 364 seats, Labour 203, the SNP 48, the Liberal Democrats 11.
The scale of the Conservative’s victory would have caught many people, but not everyone, by surprise. Conservative Central Headquarters (CCHQ) would have had an inkling in the last couple of days of the campaign of the scale of their victory when the postal ballots started to arrive and candidates’ agents up and down the country “sampled” the ballots. Full credit to the discipline of the spin doctors, briefing out stories for polling day that the election was on a knife edge, when they had already got the data showing it was going to be a slam dunk.
The Electoral Impact
This was the “Brexit” election and to put it crudely, Boris Johnson’s clarity of message “Get Brexit Done” cut through. It sunk into the consciousness of the electorate and they responded on an unprecedented scale. Jeremy Corbyn’s widely perceived lack of clarity on either side of the outstanding issue of British politics meant Labour was punished.
Seats that Labour had held up until now across the North East and Midlands fell like ten pins. Both Tony Blair’s old seat of Sedgefield and Tom Watson’s West Bromwich East fell to the Tories. Former Labour Europe Minister, Caroline Flint, lost Don Valley in South Yorkshire and her nearby neighbour Mary Creagh lost Wakefield. Denis Skinner lost Bolsover after nearly 50 years as its MP. Even in London they didn’t do that well, losing Kensington by 150, falling back in Chipping Barnet and narrowly failing to oust Iain Duncan Smith in Chingford and Woodford Green. A silver lining was winning Putney from the Tories, and Jon Cruddas holding Dagenham and Rainham by 293 votes.
The Liberal Democrats had an awful night with their Leader Jo Swinson losing Dumbartonshire East to the SNP and resigning her party leadership. They did emphatically retake Richmond Park from Zac Goldsmith, but neither of the defecting former Labour MPs Chuka Umunna nor Luciana Berger won their London seats for the Lib Dems. Both seats, Cities of London and Westminster and Finchley and Golders Green, stayed Tory. Foreign Secretary, Dominic Raab, fought off a tough Lib Dem challenge to hold Esher and Walton by 2,743 – much reduced from 23,298. No doubt the old adage of “all you need is a majority of one, the rest is bragging rights” would be on his mind.
So what does this emphatic victory mean for the property industry?
Firstly there is clarity and stability – we will be leaving the EU by the end of January 2020. Every newly elected Conservative MP signed up the pledge to support the Prime Minister’s Brexit deal. The pound’s value went up, share prices surged and investors, who would have been nervous of a Corbyn victory, will be able think of the UK as a place to go to in a more business friendly regulatory regime.
House prices are set to recover and new buyers will look to see the Tories make good their commitment to home ownership, with further help for first time buyers and a reinvigorated house building programme for sale. Manufacturers of modern methods of construction, which Tory Ministers had highlighted as a key element of their housebuilding strategy, will hope to see a strong commitment for government. The real estate sector will hope to see the planning process simplified and will look with interest to see if Robert Jenrick stays as Secretary of State and Esther McVey remains as the Housing Planning Minister.
The Tories won stunning victories in left behind towns such as Greater Grimsby. With long memories of the destruction of the fishing industry, which locals blamed on membership of the EEC, they will want to see a Brexit dividend fast and to see the Government make good on their new Towns Fund. The Conservatives plan to revitalise the high streets by cutting taxes for small retail businesses, pubs, cinemas and music venues – these towns will want further details and results.
For today the Conservatives can savour victory. This is going to be a stable government not held to ransom by coalition or supply and demand partners. For the Labour Party, this is going to be the start of deep soul searching. The British electorate comprehensively rejected their retail offer of a large interventionist state. What follows next will determine whether they can be seen as a party of government or whether they will be in the wilderness for quite some time to come.