What does a Johnson Premiership mean for Housing?

Now that we have a new Prime Minister, it is notable how little he mentioned housing in his hustings appearances, debates and interviews.

Johnson has written in the past about reducing stamp duty, especially on higher priced homes. With the latest figures from the ONS showing a year on year drop of 4% in the value of homes in London, the largest decline in a decade, he may feel he needs to quickly do something to help the capital. After all, his period as Mayor was used to burnish his credentials during the leadership campaign.

He has endorsed a housing paper by the Policy Exchange, a right wing think tank, that has called for a review of the Help to Buy scheme, further development on brownfield industrial sites and additional purpose-built homes for those wishing to downsize. The think tank’s most radical suggestion is the creation of fifteen new towns around London, which to me seem to be entirely copied from the Garden City ideas proposed by Nick Clegg during the collation years.

Remembering that during the campaign, Boris Johnson had the support of several Cabinet Ministers, both past and present, associated with the housing portfolio including James Brokenshire, Kit Malthouse and Grant Shapps, you might have assumed he would have harnessed some of these figures in his new cabinet. However this is not the case.  In the ‘night of blonde knives’, out went Housing secretary James Brokenshire, to be replaced by Robert Jenrick, whilst housing minister Kit Malthouse was succeeded by Esther McVey – the 10th person to hold this position in as many years.

However, it is surprising that nothing has been mentioned of the recent call by the National Housing Federation (NHF) for the creation of 145,000 affordable houses every year for the next ten years to alleviate the housing shortage. Perhaps Mr Johnson has assumed that the 160,000 Tory membership which he successfully targeted weren’t concerned about those that have no roof over their head.

If Boris continues  down the road of a no deal Brexit, a threat which he has been holding aloft like a sword of Damocles throughout his leadership campaign, he will have little money in the exchequer to throw at housing or much else besides. Mr Johnson talks blithely about retaining the £39 billion that the UK agreed it owed the EU as part of the abandoned withdrawal agreement, but most feel that any independent, international tribunal overseeing the matter would conclude that we will need to pay most of this back in order to meet outstanding contracted agreements.

Most economists believe that crashing out of the EU with no deal would either slow growth sharply or cause a contraction in the economy, tipping us into recession. The best-case projection from the Office for Budget Responsibility has said it will cost at least £30 billion or £550m per week. Also, many of Johnson’s leadership campaign promises are un-costed, i.e. delivering fibre optic broadband into every home by 2025.

A recent story in the Guardian newspaper chronicled several fairy tale schemes and vanity projects that Johnson supported during his eight-year stint as Mayor of London. This includesweatbox buses,dodgy water cannons and fantasy bridges that never left the drawing board. These fanciful follies allegedly cost tax payers in the capital over £940m. As PM, he could cause so much more damage if he is left unchecked and if he were to adopt this approach for the whole of the UK.

Against a background of massive challenges, I don’t see much hope for a Johnson Government to support the demand by the NHF for £12.8billion for affordable homes. He will have far too much of a struggle negotiating with the Tory membership he has disappointed, a minority Parliament who have grown weary of his boyish humour and a new EU commission commanded by those who now see the UK as an annoying irritant they are in no mood to deal with in future negotiations.

Richard Steer is Chairman of Gleeds Worldwide.