A hung parliament would be the worst situation for our economy and country according to the panel of speakers at our ‘Election Special’ breakfast in London.
Panellists stated that we wouldn’t be presenting ourselves as a grown-up country, and the uncertainty and indecision would be bad for investment and the property sector as a whole, if the outcome of the election was a hung parliament.
But what is the likely outcome based on polling of the electorate within a couple of days of the Election? The hugely insightful and knowledgeable Ben Page, CEO of IPSOS Mori, gave a fascinating keynote address on how the parties are stacking up. The polls are indicating a Conservative win with a majority of 30 to 35, but the seat share is very, very different to the vote share, and it’s not a cut and dry result.
Ben Page expects more than 80% of seats not to change hands, it’s all about the marginals. We are likely to see some Conservative seats turning red and some Labour seats turning blue.
The polling IPSOS Mori has carried out shows that Boris Johnson and Jeremy Corbyn are the least popular party leaders in quite some time. Although, Jeremy Corbyn is the least popular of any leader polled since IPSOS Mori was set up in the 1970s.
Brexit is what people are most concerned about, whilst the NHS has shot up the agenda as a growing concern for many. Housing does not figure for most of the electorate, but climate change is one of the top five issues for the first time. Ben said that Boris and Jeremy are like “two bald men arguing over a comb”, when it comes to the environment - no one knows what their policies are.
His closing remarks: we are generally happier as a country than we have been in recent years, and one million more people are exercising than in 2015. Whatever happens, things won’t be as bad as we think they will be.
Next up, a fantastic panel of speakers consisting of Melanie Leech CBE, CEO of the BPF; Rob Perrins, CEO of The Berkeley Group; Torsten Bell, CEO, Resolution Foundation; Michael Barrie, Head of Fund Management, LGIM; Kate Davies, CEO, Notting Hill Housing Group - chaired by Steven Norris, Former UK MP and Government Minister and Chairman of Soho Estates.
Steven Norris opened the panel debate with a remark about how this is an election where we are picking the least worst option. Home ownership, green belt and fundamental planning system reform are all untouchable issues for the Conservative Party.
Melanie Leech said that neither Labour or the Conservatives have the right answer to the housing crisis. The BPF hasn’t sat around waiting for Government initiatives and decisions, but has been driving itself and its own agenda, especially when it comes to social issues and becoming more customer focussed.
There is a thriving marketplace with student accommodation, BTR and senior living having a good year, and for retail, more brands are coming to London than ever before, so there’s been good news with bad. BTR can cater to the way we want to live and is giving people better quality and choice, and government policy should support this. Melanie is optimistic about the year ahead and says that their focus over the past few years will continue to be their focus in the years to come. Kate Davies had a different view, stating that 2019 hasn’t been a great year; it has been very difficult. London is losing a bit of its credibility due to the Brexit debate. House prices have held up but in London sales have taken about four times as long as they have done in the past few years. On top of that, we have the health and safety issue facing us. The green issue is coming down the line as well. What do these things mean in terms of expenditure on existing stock? We’ve made good decisions to futureproof, but there are some housing associations that don’t even know it is happening yet and are not well prepared for the future.
Rob Perrins indicated that in his first day in Parliament he would scrap stamp duty and Help to Buy, and deregulate the mortgage market. When reflecting on 2019 he says that delays to key infrastructure - Crossrail, HS2, Heathrow rail link - has been the market challenge this year. Uncertainty is becoming the new certainty. This year has been a good year for Berkeley and getting on site on many new schemes. In terms of the market, there has been low supply and low demand. Rob thinks we have taken London for granted. It has some fantastic attributes, and it is still the international hub where everyone wants to be. Rob emphasised that Modern Methods of Construction and the climate emergency are part of today’s housebuilding priorities.
Torsten Bell gave frank and stark remarks about the state of the country in terms of equality, social care and the economy: “If you want a decent economy and country, run it like a bunch of adults”. He is less confident about the future, and concerned by the lack of business investment, job vacancies falling, child poverty and inequality rising. We have had historic inequality (people and places) in the UK since the 1980s but the financial crisis has brought it into stark relief for all of us. Wealth - you’re either born with it or marry it.
Michael Barrie spoke about the shifting investment focus to the alternative sectors like Build to Rent, that are becoming mainstream. He is interested in regeneration and long term stability. In terms of volumes, 2019 has been a challenging year, but we’ve seen a better return than we were expecting. Single digit returns. If you were active in the right areas you have been incredibly busy. Disruption in the offices market by the likes of WeWork and in retail with online shopping, is forcing change and a focus on the experiential.
We all wait to see the result of Thursday’s general election, but whatever the outcome, we will get on with it the best we can, making the most of the opportunities.
