On Tuesday Boris Johnson won the Tory leadership race and will now enter Number 10 on Wednesday. Here is the industry reaction to Johnson winning the leadership.
Reacting to news Boris Johnson will be Briatin’s next prime minister, Sean McKee, the director of Policy & Public Affairs of the London Chamber of Commerce and Industry (LCCI) said, “LCCI worked closely with Boris Johnson, and his Business Advisory Council, during his time as Mayor and found him to have a strong pro-business outlook and a keenness to meet with business people to understand their concerns.
“Boris knows the vital role that businesses play in creating opportunity & wealth for the residents of this city and country.
“Now he is our PM we will continue to press for the investment and decisions that London needs in order to further drive the UK economy.”
Ranko Berich, Head of Market Analysis at Monex Europe said, “This morning’s small sterling rally should be treated with extreme caution: a serious no-deal scare, and the precarious state of the economy mean that further losses are highly likely over the coming months.
“Even though a good chunk of risk is already in the price for sterling, we are nowhere near the bottom should no-deal actually start to look like reality. With the UK economy teetering on the brink of recession, a serious no-deal scare would see GBPUSD below 1.20. Should what the Bank of England describes as a disruptive Brexit actually occur in October, sterling’s losses would be far worse.
“As this morning’s dismal CBI manufacturing survey emphasized, the UK economy is in dire straits, meaning that Boris has almost no margin for error with Brexit negotiations. With investment essentially frozen and business optimism crashing, a serious no-deal scare of the sort that seems probable under a Brexiteer Government risks tipping the economy as a whole into recession.
“The potential for a serious increase in Brexit risk seems high. The incoming Prime Minister has previously been emphatic in his insistence that the Northern Irish backstop will need to be removed from any deal, while the EU has been steadfast in insisting on it. Unless the EU is happy handing him a historic victory with a long term “standstill” agreement with no backstop, Boris will be forced to choose between a dressed-up version of May’s deal, an embarrassing extension, or no deal.”
Steven Stewart, Director of SMB Solutions, Valitor said, “As Boris Johnson enters 10 Downing Street, there are thousands of SMBs that need our next Prime Minister to take some immediate action, to help them thrive.
“One of the most pressing issues for SMBs is for business rates to be cut, this is closely followed by tackling late payments and for the government to simply listen and take advice from the people on the ground doing the hard graft, the SMB owners and employees.
“By making these changes and really listening to the people on the front line, the PM could demonstrate his commitment to the 16.3m employed by SMBs in the UK today. The new PM has a huge job ahead of him, but ultimately, SMBs simply can’t be ignored.”
Joe Pepper, chief executive officer at tmgroup, parent company of sales progression and communication tool mio said, “There are several major challenges facing the UK housing market. Brexit is the one that gets the most attention, but it is also the one that is furthest from the reaches of the housing industry to influence.
“The nation is split in its opinion on the way forward, although there’s a large majority that want the issue dealt with quickly. The challenge is that the easiest answer to that question and the one Boris Johnson has championed, is to leave with no deal on October 31, but it sadly does not necessarily achieve the wished-for outcome.
“A no-deal Brexit would undoubtedly cause short-term challenges to the economy and it does not deal with the issue that we will then seek to negotiate ‘a deal’ from outside the European Union, and this may prolong the agony for years to come.
“Away from Brexit, the new Prime Minister must address the planning laws, which were implemented in the 1980s at a time when we expected the population to reduce rather than grow, if we want to deal with the supply and demand dynamic which has had such a massive impact on affordability.
“Looking forward, all that’s certain about delivering on either Brexit or the changes required to the UK housing market is that it will require exceptionally strong personal leadership. Let’s hope Mr Johnson is up to the challenge.”
Neil Cobbold, Chief Operating Officer of PayProp said, “The buy-to-let market has stalled due to tax changes like the stamp duty surcharge and cuts to mortgage tax relief under Section 24. If Boris Johnson is able to remove all stamp duty and land tax surcharges for buy-to-let landlords, he could reinvigorate the sector – especially in areas with high-value homes where we’re not seeing a lot of movement at the moment.
“Although this could help the market, a pledge to cut stamp duty alone won’t be enough to counteract losses from Section 24 and bring the leveraged buyer back into the market. However, the emotional impact of some good news from a new government would have a positive impact on the sector.
“By now, the cost of Brexit has been priced into the market. We’ve already gone through enough periods of thinking we were going to leave, so the industry will be indifferent to the October deadline, adopting the attitude that either something will happen or it won’t – it’s out of their control. The only parts of the country that could be affected are London and other immigration hotspots, especially if the government wins its Right to Rent appeal in the High Court.
“Boris can be a divisive figure, so I don’t think he will have an overwhelming influence, one way or the other. More important will be any positive changes in the economy, who he appoints as the Secretary of State for Housing, Communities and Local Government, and how actively the person engages with the industry.
“Something that would help the industry would be if he overturned Section 24, but it’s doubtful that will happen. As we now have such a large private rented sector, it’s too much money for the Treasury to give up.
“If there was one the new Prime Minister could do to change the industry for the better it would be to regulate it properly. The current patchwork of piecemeal legislation burdens professional agents without any real enforcement to deter the small rogue element.
“A new government could, in consultation with the industry, replace it with well thought-out rules and regulations together with a central enforcement body. It would at a stroke help improve the consumer’s view of the industry, weed out the few lettings businesses that give the sector a bad reputation, help cut fraud, and bring about a higher level of professionalism. The changes we’d expect to see would be similar to what happened with financial services years ago.
Iain McKenzie, CEO, The Guild of Property Professionals said, “I am in favour of anyone who is going to improve sentiment or confidence in the housing market. Current economic data is strong, but the uncertainty of Brexit has caused stagnation in the market. Mr Johnson’s commitment to “deliver Brexit” on 31 October with a new “can do” spirit is therefore very much welcomed.
“Going forward with Boris as Prime Minister, I would also welcome any positive move on stamp duty or the additional taxes on landlords.
“The Guild has been actively promoting best practice in estate agency for 25-years, including our code of conduct for members and trading standards accredited training scheme. We therefore wholeheartedly support the government’s most recent proposals for strengthening redress and regulating the industry, giving consumers greater confidence that whether buying (re-sale or a new home), selling, letting or renting a property, they are dealing with a professional agent and there is a clear route to redress in the event of a dispute.
“However, the one big thing I would like to see happen in the future is the removal of the housing sector from parliamentary control. It should no longer be a political football kicked around by any party to gain political favour. To deliver much needed change in the sector, we need stability and clarity of direction.”