The grown-ups are back in charge

THIS MONTH’S WISE OWL| Steve Norris, Chairman of Soho Estates and Driver Group PLC and Senior Advisor to BECG Group.

Steve Norris is the Chairman of Soho Estates and Driver Group PLC and Senior Advisor to BECG Group.
He chairs the Council of the National Infrastructure Planning Association and advises a number of international clients on major developments. Steve also writes a regular column in Property Week on the Politics of Property.

Politics is a strange game as I know from personal experience. But none of us have ever been through a time like the last three years of Boris Johnson’s premiership. Years characterised by chaos and a disregard for the established order and even truth leading to his own MPs finally defenestrating him. The process for choosing his successor was a nightmare for the party and resulted in Liz Truss lasting precisely 44 full days in the job. Finally, and only because Johnson wimped out of standing again was order restored when Rishi Sunak emerged in Downing Street and together with Jeremy Hunt as Chancellor calmed the markets.

Sunak has a mountain to climb to win the next general election which we assume will be in June 2024 but there is a palpable feeling that at last the grown-ups are back in charge. I don’t care what religion our new PM follows or that he is the first British Asian to hold his job. I care much more that he’s the first PM to have made squillions out of Goldman Sachs.

Hunt’s budget was tough for traditional Tories to stomach but perhaps surprisingly has gone down well with voters. Polls now show Sunak beats Starmer on who would be the better leader and the Tories are already seen as being more competent on the economy. But for the property industry this will be a very tough year. The rapid rise in interest rates has already put a huge strain on the housing market. It may well lead to thousands of home-owners simply throwing the keys back if they can’t afford the transition from fixed rates of sub 2% to 4.5%. Property values are dropping for sure. But a greater threat is the recent move to abolish housing targets. The best estimate is that with a target to build 300,000 new homes we might only build 140,000 without that element of challenge the current system provides. The government’s thinking, which DLUHC Secretary Michael Gove seems to share, is that Tories are natural NIMBYs and that this will ensure their support. I’m not so sure. Why would anybody under 40 vote Conservative when the party seems to have ripped away any chance they might have had of owning their own home? Answering that question is the government’s biggest challenge.

All that said, I’m going to stick my neck out. I do think the Tories could still win a slim majority in 2024. It will likely be a repeat of 1992 which proved yet again that when times are tough voters stick to the devil they know. It’s why Neil Kinnock lost and why Kier Starmer’s party may yet lose too. And if a week in politics is a long time, then 18 months is an age.