9:20 AM, 23rd May 2024, About 7 months ago 33
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So – many of us thought that we were nailed on for a late 2024 election. Sunak hanging on by the fingernails. Polling is terrible (things can change, of course). There are a few theories why:
He fancies a long summer holiday (only half joking, but who could blame him if this were true). Things are the best they have been for a while (best economic growth in the G7 in Q1 ‘24, inflation down to 2.3%). Things are going to get worse in H2 so he needs to get on with it now (there wasn’t any indication of that immediately obvious to me). Surprise is the only meaningful weapon left (or it was).
I’m not going to spend a long time speculating on which of those, or mixture of those, is remotely accurate. Let’s instead look at what this likely means.
We’ve got 2 bills of real interest in the parliamentary machine at the moment. Firstly – Renters’ reform. Highly controversial – my opinion for what it is worth is that it is far better off happening under a Blue government than a Red one. I’ve had a decent chunk of property in Scotland for years, and very little changed when they phased out their s.33 – the equivalent of our section 21 – and in many ways, the system is pretty fair. For example – you don’t get “the dance” where someone pays £1 under 2 months rent to ensure they are not 2 months in arrears, on the morning of court. That doesn’t work. 3 consecutive months in arrears and you are gone. (Just one example). Abolition doesn’t scare me, but I know it does – but I would bet diamonds that what REALLY scares you is not knowing how you will still recover possession – if you want to sell, move back in, etc. – and nothing is certain until royal assent.
The second reading in the Lords, 4 hours 21 minutes of it, was just 7 days ago. Next step is committee – no date yet set. There is traditionally, upon the calling of an election, a “wash-up” period. The bill can still pass, as long as Labour co-operate, but it is tight. Hard to call what will happen. There will need to be prioritisation! Committee is normally up to 8 days. Then Report stage – several days, usually shorter than Committee. Then a third reading. THEN back to the Commons for the Lords’ amendments to be considered and THEN royal assent (when both houses have agreed). Not impossible – but you can see what shortcuts need to be in the process here. Normally wash-up is less than a week!
Leasehold and Freehold Reform is already at Report stage – so a couple of weeks further on, technically, but will it now be prioritised? Technically, the house would have risen tomorrow and not come back until 3rd June, for the Whitsun recess – but all bets are off at this stage. It would be incredible for both to be passed and it would be an achievement to get one through, at this stage…….there’s one bill currently at consideration of amendments and 6 on their third reading in the Lords – including AI regulation, employment rights, Genocide prevention and response, schools (mental health professionals), and victims and prisoners – so those are way ahead, and how long will wash-up be? Both of our bills look unlikely to pass at this stage unless there could be a really strong argument that they are vote winners, because that’s all that the incumbents are going to look at at this stage.
Then consider the likely market implications of this announcement. People (and particularly people who operate in open markets) don’t like uncertainty. Investors don’t like uncertainty. Tonight – there is just that. Sales agreed traditionally fall quite sharply – although there is momentum in this market, and post-Covid lots of “traditional” measures have changed – this could be one. I personally think there will still be an impact, particularly on the investment market – but less of an impact than some of our more historically significant elections.
What does that mean? A chance to bag a deal at, before, or after an auction? Possibly. There will be some vendors who just want to get a sale agreed before an election for a million reasons. Lots will be concerned about tax changes – and so make the most of a sale before a change of administration that is likely to be even more tax-hungry than the last and the current one. Personally I won’t be letting any of this put me off – if anything, we will be working harder than ever as the next 6 weeks are likely to contain some juicy opportunities!
How about a quick peek at the probabilities? Betting markets can do a good job, although they failed abjectly twice in 2016, both very memorably, when “Remain” and “Hillary Clinton” were both defeated at very short prices (implied probabilities, respectively, 92% and 80%). But the markets are liquid and contain good info about likely outcomes. Brace yourselves.
Most seats – implied probabilities: Labour 93%, Cons 7% (forget the rest).
Overall majority: Labour 86% No overall majority (Hung Parliament) 12% Conservatives 2%
Conservatives to lose over 200 seats from their current position: 63% (ouch!)
So – stranger things have happened but it looks like Hara-Kiri from Rishi. He didn’t help himself, in the rain, with “things can only get better” playing in the background. That soon-to-be-meme might well come back to haunt him.
Mark Alexander - Founder of Property118
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Sign Up1:26 AM, 23rd May 2024, About 7 months ago
Reply to the comment left by Monty Bodkin at 22/05/2024 - 22:22
Watch this space!
Mick Roberts
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Sign Up5:30 AM, 23rd May 2024, About 7 months ago
Nice to hear a few bits about your S 33.
Reluctant Landlord
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Sign Up8:01 AM, 23rd May 2024, About 7 months ago
issue with the RRB is ALWAYS going to be how quick court action is - the process of possession (for whatever reason) is one thing - how long you have to wait for possession to be granted AND action to effect his is quite another.
This is what is going to scare most LL's. I dont think letting property now is necessarily viewed as 'long term investment' as it once was, with hastily (and badly) pushed through legislation making it difficult to even see a way out, never mind planning for it in advance. All that is now up in the air.
Talk of rent caps and Labours plan/threats to make sure its really difficult to get possession means there are more, that are less likely to WANT to let property now or if it becomes vacant in the next few months for fear of being stuffed by what could be a forever tenant. Not bad perhaps if they are good tenants, but what if they are a nightmare. Hell of a risk to take when at a snap of a finger they can stop paying rent and the government itself does not care a jot.
Wil the RRB even get through the 'wash up'? If not, what happens next? Does Labour have to start the whole process from the start? Perhaps that will prove respite...or we all then try and sell up ahead of the Tsunami expected again as they supercharge the RRB to ensure PRS oblivion????
Nerves shattered!
Adam Lawrence
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Sign Up8:10 AM, 23rd May 2024, About 7 months ago
Reply to the comment left by Reluctant Landlord at 23/05/2024 - 08:01
The more I think about it the less likely it seems either bill gets through the wash-up. Gove is an overachiever though, so who knows. How important is housing at the moment in this election process?
https://yougov.co.uk/topics/society/trackers/the-most-important-issues-facing-the-country
A great temperature taker - the economy is down to 49% but still the highest - then health - then immigration right back up, then throw a blanket over the environment, crime, and housing at 21-24%. The top three are miles ahead in voter importance.......
LaLo
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Sign Up9:46 AM, 23rd May 2024, About 7 months ago
Get writing/email the housing ministers for both conservative and Labour to ‘air your views’ quick as policy making will be happening now! Keep it short as they won’t have the time or inclination for anything lengthy!!
DAMIEN RAFFERTY
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Sign Up10:09 AM, 23rd May 2024, About 7 months ago
Many MP,s will be packing up for the summer holidays and the very real chance they won't be back !
Good news I get to do the elections in 6 weeks as a Presiding Officer
Chris Brown
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Sign Up10:20 AM, 23rd May 2024, About 7 months ago
Reply to the comment left by david porter at 22/05/2024 - 21:26
Drop the it in your second line.
Gove should not get through; his chicanery over Boris and ever since is a mjaor contributor to the mess. If the Conservatives have no given up on Propert Rhts, we'll all become trapped for life providing Sical Housing at our own expense. Back to the post-war perod at the gallop.
Jeff Niehorster
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Sign Up10:20 AM, 23rd May 2024, About 7 months ago
Sunak likes to move house in July
Dylan Morris
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Sign Up10:21 AM, 23rd May 2024, About 7 months ago
Reply to the comment left by Reluctant Landlord at 23/05/2024 - 08:01Agree with your comments entirely. I can see a Labour landslide and the RRB being passed without any court reform. After all the courts only really exist for landlords’ benefit rarely do tenants go to court. A lengthy court process taking many many years to get a case through will be a huge benefit to tenants and hence the Government of the day will welcome this. It will be a crazy risk being a landlord in future with no effective court process, especially if highly leveraged. Tenant behaviour will change and they’ll see themselves in the driving seat once S21 is abolished. I can’t afford to kick all my tenants out and sell in one go, as the costs of having a property empty and paying mortgage, council tax and utilities are prohibitive, I just don’t have the cash. Luckily I have decent tenants but as they leave in the normal course of things, each property will go up for sale. I sold one property last year and another last month so two out of seven gone. My nerves likewise are struggling with it all and let’s face it, it ain’t going to get any better.
Reluctant Landlord
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Sign Up10:27 AM, 23rd May 2024, About 7 months ago
Reply to the comment left by Dylan Morris at 23/05/2024 - 10:21
I agree - the only thing a highly leveraged LL's might risk, is just that - banking on a bad non paying tenant that needs removing, that WILL NOT go to court to make a claim for illegal eviction, if said desperate LL gets 'Dave' round to 'assist the tenant in moving abode'....
Back to the 'good old days' of swift localised justice I wonder?