Rishi Sunak has become Prime Minister after Liz Truss resigned due to a series of missteps in the mini-budget which caused the pound to drop in value. Here’s how this new appointment may affect the lettings sector.
Sunak has not commented directly on renters’ reform, although he has previously shared his priorities for housing.
Back in August, he showed support for home ownership for today’s renters: “We are the standard bearers for capitalism. But we can’t expect future generations to share our belief in capitalism if they can’t get their hands on capital. That’s why I’ll do whatever it takes to build affordable, plentiful housing, building the next generation of Conservative voters.”
His proposals included requiring developers to finish each project before being granted planning permission for another development in the same area, and giving councils more power to buy undeveloped land at a reduced rate, if it’s not built on in a given time frame.
He has also focused his attentions on brownfield development and protecting the “green belt”.
“Green belt land is extremely precious in the UK. Over the last few years we’ve seen too many examples of local councils circumventing the views of residents by taking land out of the green belt for development, but I will put a stop to it,” he says.
“More homes can be built while protecting the green belt and our most precious landscapes. Data shows that well over a million homes could be built across the country on brownfield sites, with particularly high capacity in the North West, Yorkshire, and the West Midlands.”
Michael Gove is now back as Secretary of State for Levelling Up, Housing and Communities. As the driving force behind renters’ reform, this suggests that the bill will still be a priority under the new government.
Head of Policy and Campaigns at Propertymark, Timothy Douglas, says: “Mr Gove previously focussed on regional disparities and fixing the cladding scandal, but he now needs to go further and tackle the supply crisis in the private rented sector, implement the next steps for leasehold reform, set out the UK government’s plans for home buying and selling as well engage with the sector to get more people onto the housing ladder and stimulate right sizing to release large, family homes.”
Reports in the days after Rishi Sunak’s appointment show that mortgage interest rates have started to drop, with some lenders, such as Santander and Yorkshire Building Society’s Accord Mortgages, cutting their rates.
The average two-year fixed rate mortgage was at 6.65% before Truss’s resignation, yet this fell to 6.55% by the following day.
“After so many banks and building societies either pulled out of the market or dramatically increased their fixed rates, it is good to see lenders lowering their prices again,” says Aaron Strutt of Trinity Financial.
“The cost of funding has come down so we expect more rate reductions over the coming days.”
There is no constitutional requirement to call a general election based on the current circumstances.
However, there is political pressure to call one from other parties. Keir Starmer says that the government has lost “control of itself and the economy” – while the Scottish First Minister, Nicola has said that a general election has become a “democratic imperative”.
Currently, Labour has a strong lead in the polls meaning that they are expected to win if there were a general election.
The party has previously shown support for rent caps and a rent freeze, a focus on boosting social housing, and making home ownership a reality for 70% of the UK. It has also promised to publish a white paper in its first few weeks in power on renters’ reform. This would then be put to a vote within 100 days of winning a general election.
You can read more about Labour’s plans for the sector in our guide.
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Originally published on Goodlord’s Newsagent.