In 2015, as George Osborne delivered his Autumn Statement outlining rising growth, lowering unemployment and a buoyant economy, he cannot have imagined that by the time of the next statement, the UK would be leaving the EU, Donald Trump would be President-elect of the United States, and he would be watching ‘spreadsheet Phil’ Hammond deliver the lines as Chancellor of the Exchequer. Politics is certainly a funny old game!
Heading up DCLG since the summer reshuffle has been Sajid Javid. Often branded as a free-market Thatcherite, the former Business Secretary has taken to his new job with surprising zeal. Since his appointment, many have remarked on the different tone on housing emanating from the Conservative Party and how it is a vast improvement from the Cameron/Osborne years.
Javid promised at Conservative Conference to unleash a major house-building programme, which has been matched by a £2.3bn Housing Infrastructure Fund in the Autumn Statement and the assurance that a Housing White Paper is on the way. The Government may just be playing politics after losing the London Mayoral election and discovering it was really ‘a referendum on housing’. But regardless, these are extremely positive signs for the industry as it shows that Government is listening, engaging and seeking to address the housing crisis.
The ‘Notting Hill set’ obsession with home ownership has been replaced with an acceptance that renting is vital to help solve the country’s housing crisis. The Housing Minister, Gavin Barwell, has admitted that having fewer homes for sub-market rent has increased the amount of housing benefit being paid to those renting privately. This is a small but perceptible change in Government policy towards social housing and we can expect the pending White Paper to reflect this new, pragmatic stance.
So, outside of housing, what is key lesson from 2016? Bet on the opposite of what the polls tell you. France is to hold its General Election in April and the pollsters have already embarrassed themselves after the dramatic and early exit of Nicolas Sarkozy from the race. François Hollande’s staggering unpopularity suggests that neither he nor anyone from his Socialist Party will make it to the final two. At the moment the favourite to win is François Fillon but it would be remiss to disregard Marine Le Pen, the leader of the far-right National Front, as the possible incarnation of the next political earthquake.
Le Pen has described Brexit as the most important event since the fall of the Berlin Wall. She is adamant that if elected she would similarly seek for sovereignty to be returned to France. With the triggering of Article 50 pencilled in for March, a ‘Frexit’ would have great implications. All analysis of Brexit’s effect on the housing market would be redundant as a Brave New Europe was ushered in.
We will also see the German General Election in 2017. Even after 11 years in power, Angela Merkel remains one of Germany’s most popular politicians but she severely alienated large parts of the electorate after opening Germany’s doors to Syrian migrants. Merkel’s party is perhaps least concerned about the precise form a British departure would take and so any change in power would, far from prevent it, make Brexit even more messy.
No election, however, will ever again cause as much drama as the 2016 US Presidential race. Market analysts have spent the weeks following the result expressing their nervousness over the repercussions of Trump’s victory. However, some believe that an indirect consequence of the shock result may be an influx of American buyers to London. So it’s not all doom and gloom – Trump as President could be an early Christmas present for Britain’s housing sector.
A second Trump effect could be the quick signing of a UK-US trade deal. In contrast to Obama’s ‘back of the queue’ approach, the incoming administration has said it cares ‘deeply’ about Farage Britain and a strong relationship between the two nations would be desirable. Such a deal would make it much harder to claim that Brexit will leave Britain isolated and alone.
So rather than a chance to catch our breath, it looks as if the political whirlwind will continue into 2017.