Rishi Sunak will become prime minister this morning after a meeting with King Charles III.
He will be appointed as the country’s next PM at around 11am and asked to form an administration, which will include yet another new housing minister.
Cluttons’ recently appointed director of research and insight, Grainne Gilmore, described Sunak’s appointment as PM as a “much-needed step away from the political instability of the last few months”.
“The next hurdle is the budget next Monday, but if there are no major surprises, there will then be an opportunity for politicians to get back to business as usual, something which the markets and businesses will welcome,” she continued.
“Once the government is stabilised, they should prioritise providing clarity around housing policies, including planning reforms, to provide a clear steer for homeowners and businesses across the industry,” Gilmore added.
Nick Sanderson, CEO, Audley Group, believes Rishi Sunak, as the new PM, “has a task on his hands and must get his feet under the table quickly”.
He commented: “Key issues like housing, health and social care have been left on the ‘to-do’ list through the political turmoil of the last few months, and now desperately need attention. This doesn’t have to mean investment, especially at a time when the government needs to look at cost cutting, but it does require thinking cleverly.
“Planning reform, which mandates for age-specific housing in any new housing scheme, would have the single greatest impact on both the housing market, but also the way we look after our ageing population. And importantly, for the new Prime Minister, this doesn’t need a cash injection from the government coffers. Progress has started with the cross departmental Housing with Care taskforce, and this must now be prioritised.”
Tom Bill, head of UK residential research at Knight Frank, remarked: “Falling borrowing costs will support demand and transaction volumes in the UK housing market, but this should be seen in context. Mortgage rates may come down compared to the period following last month’s mini-Budget but a 12-year period of ultra-low borrowing costs is over. As demand subsides, 18 months of double-digit house price growth will also come to an end.”
Timothy Douglas, head of policy and campaigns for Propertymark, said: “With a new prime minister, there will likely be changes in DLUHC. The industry is weighted with frustration at the inconsistency of leadership in housing.
“Housing is a huge conversation right now and needs to be prioritised by the prime minister, with a cross departmental, long-term strategy.”
Lawrence Bowles, director of research at Savills, added: “The uncertainty of the last few months has had a material impact on gilt rates: the rate at which the UK government can borrow. In turn, this impacts the cost of borrowing for the rest of us. It affects mortgage rates for home buyers, development debt costs for housebuilders, and refinancing costs for property investors.
“Anything that helps bring certainty and confidence back to the market is likely to reduce borrowing costs. That, in turn, will reduce affordability pressure for households securing mortgage finance, for housebuilders starting on new sites, and for investors buying and operating homes for rent.
“In that sense, the trajectory of gilt rates over the last few days is reassuring. While government borrowing costs remain far higher than they were in the summer, they have declined substantially since the highs immediately following the so-called “mini” Budget. And with more breathing room, lenders should feel the confidence to put more products back out to the market.
“We can still expect to see affordability pressure grow in the coming months as mortgage costs rise. We can take some comfort, at least, that this pressure will peak at lower levels than we might have feared previously.”
SOURCE: Property Industry Eye | OCTOBER 25, 2022 | MARC DA SILVA
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