Written by Priya Shah
Senior Account Executive
When Harold Macmillan became Prime Minister in 1957, he was asked what would determine his Government’s course. He responded: "Events, dear boy, events" and since then this phrase has infamously been quoted on numerous occasions to justify outcomes. Never has it seemed more apt to use this phrase than to describe Theresa May’s first year as Prime Minister.
13th July 2017 marked Theresa May’s first anniversary as Prime Minister and it goes without saying that it hasn’t been an easy ride. I look at how events over the past 12 months have impacted the housing sector.
July 2016 – A new PM
Following the ‘leave’ referendum result, David Cameron stepping down as Prime Minister, and after a short leadership contest in the Conservative Party, Theresa May officially became the new Prime Minister on 12th July 2016.
The swift turnaround in the Party resulted in a small boost to the markets. Property groups such as Taylor Wimpey reported an increase in shares of 3.2% and Barratt Developments 2.8%, reversing some of the losses they’d experienced in the previous few weeks.
August 2016 – ‘Business as usual’
Unlike most quieter summer periods, August 2016 was ‘business as usual’ for Theresa May. On 2nd August 2016, Mrs May launched the industrial strategy as one of her Government’s top three priorities, to prepare Britain for Brexit. The strategy included a focus on reducing the productivity gap between Northern regions and parts of the South.
September 2016 – ‘No snap election’
For the first time Theresa May publicly ruled out a snap election, stating in an Andrew Marr interview, “I’m not going to be calling a snap election. I’ve been very clear that I think we need that period of time, that stability, to be able to deal with the issues that the country is facing and have that election in 2020.”
This continued stability was music to the markets’ ears.
October 2016 – A spring in her steps at Party Conference
Theresa May received waves of applause as she addressed a packed auditorium at the annual Conservative Party Conference. She focused largely on how Brexit would work and what leaving the European Union would mean for the country, while leaving individual policy areas for relevant Cabinet members to announce. Indeed, Communities and Local Government Secretary, Sajid Javid said in his speech, “we will publish a Housing White Paper later this year, with further significant measures, all helping us towards our ambition for a million new homes by 2020.”
November 2016 – “Move over May”
The US sneezed and the rest of the world caught a cold. In a series of unpredictable events, Donald Trump won the US Presidential election on 9th November 2016, immediately sending shocks to the markets.
As an advocate of free trade and reviving industry, President Trump’s economic thinking should have been somewhat aligned with Theresa May. However, former UKIP Leader, Nigel Farage, was the first to meet the new President elect, raising eyebrows about the future of the UK and USA’s ‘special relationship’. This did no favours for Theresa May in trying to progress a coherent Brexit strategy.
December 2016 – All alone at the EU Summit
A picture says a thousand words and Theresa May standing awkwardly in the middle of the room at the December EU Council summit, while other EU leaders chattered and embraced, has been described as ‘Brexit in a single shot’.
Of course, in later coverage of the EU Summit, Theresa May was seen chatting and laughing with other EU leaders, but the earlier incident was a sour reminder that Brexit was not going to be easy.
January 2017 – 12 point plan
In her second most significant speech since becoming Prime Minister, Theresa May set out her 12 point plan for Brexit on 17th January 2017, including leaving the Single Market, thereby putting at question freedom of movement.
This announcement was a blow to the UK’s construction industry, which relies heavily on EU workers and which wanted reassurance that there would be flexibility for EU skilled workers to continue working in the UK. Simon Conington, Chairman of the Recruitment and Employment and Confederation said: “One thing is clear: a loss of access to the EU's skilled workforce has the potential to slowly bring the UK's property and construction sector to a standstill."
February 2017 – Housing White Paper
In a month where Brexit shenanigans were continuing in the background, the long-awaited Housing White Paper, ‘Fixing our broken housing market,’ was finally published. The delay was apparently caused by Tory MPs backlashing on the proposal to make more green belt land available for development. Some Tory MPs had even privately warned that they were prepared to rebel against the Government if the plans were too aggressive.
However, a White Paper that focused on delivering more homes, offering more security for renters and promising more affordable housing, demonstrated that Theresa May was attempting to address the housing crisis amidst Brexit.
March 2017 – Article 50 triggered
On 29th March 2017, Theresa May triggered Article 50. This next milestone in the Brexit timeline was a little boost of stability to the property market as the Government finally provided certainty that its plan for leaving the EU could not be derailed.
April 2017 – Snap general election called
On 18th April 2017, Theresa May announced a snap general election.
The property industry reacted with mixed views. Lewis Johnston, Parliamentary and Public Affairs Manager at RICS said, “the move inevitably puts a question mark over policy and creates further uncertainty across the built environment.”
By contrast, Jon Neale, Head of UK Research at JLL (real estate services) said “the announcement of a snap general election on 8 June is a genuine positive for the UK property industry. It will mean that a general election is no longer likely to coincide with the end of the two-year negotiating period following the triggering of Article 50.”
May 2017 – Local election victory
Theresa May’s Conservatives gained more than 550 council seats and swept up shock victories in mayoralty contests in the West Midlands and Tees Valley in results that placed her party on track to secure a thumping majority in the general election.
June 2017 – General Election and Grenfell Tower fire tragedy
Almost a year in the top job in the UK, 8th June 2017 was D-Day for Theresa May with the General Election. At 10pm the exit polls predicted a hung parliament and the pound “fell off a cliff.” In what was already uncertain territory, the prospect of a hung parliament sent the pound into yo-yo mode.
Then Housing Minister Gavin Barwell lost his Croydon Central seat and sent further uncertainty to the housing sector with regards to policy direction. With uncertainty comes pauses in investment and housebuilding decisions.
Less than a week after the Election result, a fire struck at Grenfell Tower in the Royal Borough of Kensington and Chelsea. The tragedy sent shockwaves in the housing industry, with safety checks happening in every tower block and construction practices being reviewed. Hundreds more residents have also been evacuated from tower blocks due to safety concerns.
July 2017 – ‘Anniversary blues’
Having failed to achieve a ‘strong and stable’ government, Theresa May has called on rival parties to ‘contribute and not just criticise’ the Brexit plan. Although the DUP are there to support Theresa May’s Conservative Government when required, the call to other parties is an acknowledgment of her diminished authority and shrivelled majority.