What could the Cabinet reshuffle mean for the London rental industry?

News at Kings Group | 02/02/2018


The recent Cabinet reshuffle saw the appointment of the 16th Housing Minister since 1997. Reading West MP Alok Sharma has now been replaced by Dominic Raab after just seven months in the role.

Theresa May’s bid to revive her government with a Cabinet reshuffle saw new additions, exits and changes – with Justine Greenings resigning after refusing a job as work and pensions secretary.

What’s more, as part of Sajid Javid MP’s re-appointment as Secretary of State for Communities and Local Government, his department has been renamed the Ministry of Housing, Communities and Local Government.

But what does this mean for buyers, sellers, landlords and tenants in London?

Following Chancellor Philip Hammond’s bold housing pledges – including promises to build 300,000 new homes a year by mid-2020s along with banning the practice of new-builds being sold as leaseholds – some uncertainty on how the government will achieve these targets continues to linger.

Javid commented: “Building homes our country needs are an absolute priority for this government. The name change for the department reflects this government’s renewed focus to deliver more homes and build strong communities across England.”

 

Cabinet level

The reshuffle marks the first time a Cabinet minister has had responsibility for housing for over 40 years. For a long time now, there have been calls for housing to have a seat at the Cabinet table, given its importance to voters. This was finally granted in the reshuffle, and gives hope to many that May’s promise to fix the broken housing market was sincere.

Now placed at Cabinet level, the housing market could be taken more seriously by the government as a key domestic issue, up there with education, health, defence and the economy.

While the government has expressed concern on affordable housing and vowed to help more first-time buyers onto the property ladder, critics say this hasn’t been backed up with decisive action. Given the significance of the housing market, there is certainly plenty for Raab and Javid to be getting on with in their new roles.

 

Housing reaction

While everyone waits for the consequences of the reshuffle with bated breath, the clear ties between the Housing Minister and Javid’s department should make things smoother and more streamlined. Whether they can achieve their targets, however, remains to be seen.

What’s more, the appointment of legal expert and outspoken Brexiteer, Raab, has raised some eyebrows, with many claiming there is no point getting to know him as history dictates that he will not be in position for very long.

There wasn’t negativity across the board, however. The Royal Institute of Chartered Surveyors (RICS) congratulated Raab on his appointment and said it was looking forward to working with him ‘across the private rental sector, housing supply and planning reform’.

 

Predictions

So, will the government’s new duo make any difference to the housing industry in London?

For starters, the government’s fresh impetus on housing could see improvements for the industry and it now needs to work on introducing long-awaited outlined legislation such as the tenant fees ban.

Demand from tenants in the capital will remain strong, meaning rental price growth should be stable in 2018.

What’s more, there are still plenty of opportunities for sellers and landlords this year. Despite Brexit and political uncertainty, the property market has remained resilient and people continue to take a business as usual approach.

Whatever the political or economic situation, property in London will remain profitable and a solid investment, with demand from people wanting to live in one of the biggest cities in the world to continue growing.

While it’s unclear what the reshuffle will ultimately mean for the housing market overall, many are hoping that the decision to include housing in the Cabinet is the start of a more pragmatic approach to housing policy.

Here at Kings Group, we can provide guidance on selling or letting a property in North London, East London, Hertfordshire and Essex. For more information, contact your local Kings Group branch today.

 

 

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