“Be careful what you wish for, you might just get it” - origins from Aesop’s Fables.
This week’s quote is one about caution and consequences - and you will see just why in the deep dive.
Before we go into this week full throttle - Rod Turner and I delivered another great workshop this week, on Mergers and Acquisitions and Joint Ventures. Fantastic feedback from the attendees, which we are most grateful for.
The next workshop will be held on Wednesday 1st October, in London - subject matter this time is Investment, with an emphasis on what metrics you really need to be considering to run your property business properly, and building your business to scale. How have we done so many deals? We’ll tell you! Save the date, the workshop is not online yet.
We also have a space in our Boardroom Club, which is designed to help SME property businesses to scale to the next level. We are looking for existing investors and developers who commit 20+ hours to their property businesses per week, and I’m very happy to have a no-obligation chat about the Club if you just leave me a comment or send me a direct message. Or - tag anyone else you know who you think might benefit from joining the Club!
Keeping an eye via Trumpwatch. The overall procession continued, inching away from traditional US democracy day by day with everyone being too scared to say anything, as the “Big, Beautiful Bill” was ceremonially signed on 4th July alongside military flyovers. Extra defence spending is about the least controversial part - permanent tax cuts and 1000% increases in immigration enforcement upset far more people.
Let’s not forget - there’s still no deferral on what’s now just days away, the tariff 90 day period (in which 100 deals were going to be negotiated) - the closer we get to the deadline the worse or weaker another deferral looks, so is it time to call the second bluff in a couple of weeks?
Trump’s quest for the peace prize continues as well, putting forward a 60-day mediated ceasefire - in terms of his efforts to end wars, I do feel they come across as particularly genuine with an opportunistic tilt if the door is open.
There’s also a visit in the diary for his favourite Scotland, with golf being the main item on the agenda.
From the yield curve perspective, yields were on the rise - just a little - in the US this week. That never offers a positive backdrop - and you’ll see as this article unfolds that a positive backdrop would have been helpful in the UK this week…….before the Independence day holiday, positions started to be opened preparing for tariff-induced volatility. My biggest fear is that Trump believes that if you put interest rates down, as the Federal Reserve, regardless of anything else, that bond yields will fall. He completely misses the nuance that if there’s no confidence in the ability of the chair or the entire Federal Reserve to manage the short-term lending rate responsibly, then bonds crashing and yields rising is a very live possibility! Instead he just tweets to Jay Powell telling him that the base rate should be 1%. If it was, the yields on longer term bonds would go nuts - upwards! Affecting - amongst other things - the mortgage market! At the very best it kicks the can down the road - so perhaps Mr Trump does understand all this and just wants good interest rates for his presidency, and hang the long term consequences - but this wouldn’t be good for, and wouldn’t please, the people.
Let’s get to our subject matter - the real time UK property market. Chris Watkin delivers with the reliability of Amazon - Week 25 is now reported on. Listings printed 36.7k, no material change on last week’s 37.7k, but are still 5% higher than 2024 YTD and 7.6% higher than the pre-pandemic market. My “10% more stock than a normal market” ready reckoner is clinging on. We are 14.9% ahead of the 9 year average, but that does include 2020 which pollutes the figures somewhat. We’ve inched back towards the mean over the past couple of weeks, meaning that week by week we are listing less than the historical averages (just for those weeks in isolation).
26,700 price reductions, 14% reduced in May, compared to last year’s 12.1%, April’s 13.4%, and the 5-year average of 10.6%. More stock, more reductions - absolutely and relatively. 32% more reductions than the 5 year average, if you take the difference between 14% and 10.6%. “25% more reduced properties than a normal market” also works as a ready reckoner. One in seven properties on the market are being reduced each month (so we are currently running at a little over ONE HUNDRED THOUSAND price reductions per month, to be clear!). Can’t find a deal? Have a word.
27.5k homes sold subject to contract. Healthy is still the watchword. SSTCs are up 8% year on year and 15.6% on 2017-19, and still nearly keeping pace with 2022 (which to this point was a very hot market indeed). We went into June with 756,675 homes on the market - as the market got stickier before the pandemic that number was c. 660k, a sellers’ market is more likely to be under 600k. At the end of May 2024, 694k were on the market. It’s a lumpy trend upwards in just May and with this amount of stock on the market, it will be continually hard for prices to surge forward in the coming months - the “flat” feeling will likely manifest in a steady market without much excitement as we head into “summer proper”. The first month which sees fewer on the market that isn’t November or December would be a tell that the glut of stock - provided at least in part by exiting landlords, the “never spoken about” truth of this current market - has reached its peak, but there’s no guarantee that we are there yet.
Fall throughs are staying below the 7-year average, at 23.7% (last week 23.2%). All relatively normal “noise”. The net sales are still playing ball - 6% up on last year and 11.1% higher than 2017-19 - not quite at 2022 levels but the stamp cliff will have forced a few more transactions out of bed of course, and as the year progresses then in the absence of any more shocks, things will likely catch up because transactions were significantly “disturbed” by the 2022 budget and the bond markets, of course, in comparison.
I always give Chris a weekly shout out here because he’s more prolific than “just” this epic tome he releases weekly on the UK property market - he comes up with some great stats on a regular basis. Drop him a like, subscribe, and all the rest of it and some kind words for his content creation. If you are in the industry and want support in growing your business or to be a more effective communicator/be more in touch with your local market - that’s his core business - give him a shout. The article gets published on the Property Industry Eye website, and the video on his YouTube channel - @christopherwatkin
- Here comes this week’s dose of macro-aggression. We had the Bank of England Money and Credit report, which is always important to analyse. The Nationwide house price index caused a fuss, and let’s look at the justification, or not, behind that. The finalised PMIs were out including construction, so we will look at the more detailed update on the flash reports from last week - good news on that front - and then a week that reminds us all why we keep an eye on the gilt yields.
The Money and Credit report for May, then. Net borrowing back to something like normal - £2.1bn for the month after stamp duty distortion (huge net borrowing in March, negative net borrowing in April). Net mortgage approvals - still over the 60k mark and back towards the 65k mark which is the sign of a particularly healthy market - at 63k. Remortgages - up to 41.5k, which was a really significant increase - perhaps many who had waited, and also felt the flip flop of the tariffs and other global impacts on yields, decided to wait no longer. We haven’t had a number over 40k for around 2 and a half years.
Milder May saw less than half the expansion in individual consumer credit expansion compared to Awful April as well, as the pain of that month subsided somewhat. The money supply also moved upwards again by around 0.2%, but only to just above where we were in September and October 2022. The pace upwards has picked up slightly, though, which again is not conducive to a 2% inflation target.
The drawn rate - the rate at which the average mortgage was drawn down - was 4.47% in May - the stock of outstanding debt now stands at 3.87%. That convergence continues, but very slowly - at several basis points per month. At the point where these lines cross, we know rates are on a downward trajectory and we also have the final confirmation that the housing market has totally absorbed the transition away from cheap debt. That still looks something like the end of 2026 at the current pace of change and the drops in rates that aren’t leading to much in terms of lower 5-year gilt and swap yields.
Overdrafts came in at 22.28%, credit cards at 21.54%, and personal loans at 8.72% on average. SMEs nearly borrowed more than they did one year ago - a phenomenon that hasn’t happened since August 2022 - but the growth rate was still -0.2% year on year. Large businesses however really pressed on with borrowing at an annual increase of 8.4% year-on-year which is huge. The larger companies paid 5.6% (it sounds like a very large loan might have distorted figures here) versus 6.54% to SMEs - but either way, both of those numbers were a significant reduction on April’s numbers in terms of the cost of the debt.
Time deposits for individuals in May attracted an average of 3.92%, whereas instant access sight deposits were at 1.96% on average. June’s figures will be interesting given what the Nationwide had to say about June, but we will have to wait one more month for those. In relative isolation May looked like a return to normal for the housing market after the SDLT changes that came in on 1st April, as far as credit conditions were concerned.
Onwards to the Nationwide, then. As it was the end of a quarter we got regional and national HPIs from them this month. The figure that caused the fuss, however, was the monthly print of prices down 0.8%. That put annual price growth down to 2.1%, and Nationwide’s Chief Economist didn’t have much to specifically say about this. Instead he just blamed stamp duty for the noise/front loading transactions (perfectly reasonable) - and said that they expect activity to pick up as the summer progresses, which is very much what’s going on. They pointed to the usual cocktail, low unemployment, earnings rising healthily (above inflation), household balance sheets are strong and borrowing costs are likely to moderate a little if Bank rate is lowered further in the coming quarters - as they expect.
They tend to have that in there as a cut and paste job, these days, and until this week came along that all looked nailed on, to be honest - but more on that later, and in the deep dive.
Nationwide also point to a narrowing in the north-south divide, with Northern England up 3.1% year on year (including the midlands) versus 2.2% in Southern England (including East Anglia).
One point I’m keen not to gloss over is the performance of flats versus houses, which is lost in all of those figures; Nationwide say flats are up 0.3% this year, versus semi-detached at 3.3% and detached at 3.2%. Terraces are up 3.6% - so “house price growth” is a bad piece of wording at this time. “Property price growth” is 2.9% (they don’t distinguish as to why their annual percentage change is listed at 2.9% but their annual change is 2.1% - you wouldn’t think they would be that different but data integrity and transparency are not the strong points of the Nationwide index) - houses are up closer to 3.5%, according to Nationwide.
Only Wales is lagging behind England according to Nationwide at 2.6%, Scotland printed 4.5% and Northern Ireland rocks on at 9.7%. Parsing further regionally, the North printed 5.5%, with London lagging at 1.4% and East Anglia even further behind at 1.1%.
On a quarterly basis, with no fanfare at all, Nationwide also updates their quarterly “real house price” table - you have to google to find an excel file, so it is an “if you know you know” sort of piece of info! They adjust for RPI rather than CPI - since RPI has been around for longer, and the time series is very long - they also run forward an upward trend over time which I happen to disagree with, noting that the growth in the past 20 years has basically only been at RPI levels. This “real house price” looked to have bottomed - and I first identified 2 years ago in a supplement that house prices were the cheapest for 20 years. However, because of their negative June print, we’ve found a lower low in that time series - and so now we are once again at the cheapest point in inflation adjusted house prices for 22 years.
Let that sink in. Let all the nonsense and the noise from the media ebb away. Adjusted simply for RPI (and wages have outperformed RPI - although not by much, we must admit) - houses are cheaper in real terms today than they were 22 years ago. In spite of the insane imbalance between demand and supply that’s only worsened in that period for potential buyers. At that point (end Q2 2013) the average Nationwide house price was £167,294 in nominal terms - it is now £272,751.
If you are investing in something for the long term, do you want to buy at historically low prices, medium prices, or high prices? We all know the adage “buy low, sell high” - a great mantra - easy to say, not so easy to do. However, we also know that many are not cut out to buy low if they think prices might continue to go down - and in real terms they might. Right now - when looking at the next 3 months - we will have house price growth below 3.5% annualised, I’m sure (stamp duty noise adjustments notwithstanding) and inflation at 3.5% or more, when it comes to RPI. Timing the exact bottom is a fool's errand, though, and buying a house is not usually a fast process. This opportunity lasts for quarters and years, in fact - out until possibly 2030 or so, although as headlines pick up on faster house price growth in 2026 and beyond, more investment money will come into the market.
Nationwide ticked off, then. PMIs. Overall, things improved a little bit on the flash numbers as reported last week, but got a very positive writeup. Perhaps they knew something - because the final print was considerably better than the flash writeup. That’s quite rare - usually the flash numbers are pretty close. The flash composite PMI was 50.7, but the final print was 52 - not quite up to the long run average of 53.3, but an awful lot more meaningful than just over even. The driver - as always - was services which printed 52.8 instead of the flash 51.3.
If you’ve noticed services above the composite, you will know that means that the other component parts are in fact most likely in decline - and they are. Manufacturing printed 47.7 which was the same as the flash number, and construction hit 48.8. It’s an improving slope back towards 50.0, but still in contraction territory (6th month in a row). Housing activity is finally rising - and printed 50.7, so just got its nose in front - civils and commercial are both falling and printed 44.2 and 45.1. Housebuilding was ahead of the 50 spot for the first time since September 2024, although that commercial activity print was the sharpest drop in just over 5 years.
What took the credit? More stable demand conditions, which makes sense, although Nationwide’s house price index looks to potentially upset that apple-cart this month. Business activity expectations dropped to a 2.5 year low, unfortunately. Overall - the best print for 6 months, but a bearish 12 months ahead for construction, it seems. Housebuilding sounds like it will be doing the legwork after a period of shrinkage which correlates with the Liz Truss budget of 2022.
The manufacturing PMI was on the other side of optimism, though. Whilst things you don’t want to be falling - production, new orders and employment - all did fall, they fell at slower rates. Orders-to-inventory, seen as a leading indicator of future production trends, climbed to its highest since August 2024. Inflation softened. Business optimism was at a 4-month high. You could see this month’s print as perhaps the first of a world that’s adjusted to the employers’ NI shock.
Services, with that healthy looking print, were full of more bullish headlines. The fastest rate of service sector growth for 10 months. New orders rising for the first time in 3 months. Yes, staffing was once again down, so that remains a concern - but prices charged inflation is the lowest since February 2021. The Economics Director was a little more cautious - a modest rebound in service sector growth, thanks to a turnaround in domestic business and consumer spending. The Q1 data which was released this week on savings did indeed back that up - the first fall in the savings ratio in over 2 years, from 12% to 10.9%. What’s been blamed is higher living costs - although that seems strange given the rate of inflation over those past 2 years, so I’m not sure that’s fully supported by the facts, frankly. That ratio is still historically high, please note.
Back to the Economics Director’s report - exports are still an issue and hurting service sector growth, he reports. Headwinds from tariff uncertainty and also geopolitical tensions were of course mentioned, although if you trust the markets that has all blown over at this point. This was the 9th month of employment shrinking in the private sector according to respondents, with hiring freezes and the non-replacement of redundancies and voluntary leavers being the reality on the ground.
As usual the report finishes off telling the Bank of England MPC what to do, and the feeling from the PMIs is that there’s more than enough positive news around cost inflation for one more cut to be in there from August. Just one week ago this was at penalty kick status - but with that in mind, let’s segue to the gilts and swaps.
You might remember we’d crossed the magic 4% rubicon last week. We opened at 3.965% on the 5-year gilt. Then…..there was Wednesday. A brief spike when the vote happened on the welfare “reforms” in the commons. The rebels very much had a cause, and the markets interpreted this as “we knew it, this isn’t a government that will cut spending - they were just pretending”. The yields jumped in something that looked like a Truss moment, very briefly - at 11:55 AM the yields crossed 4% on the 5-year to get to 4.002%, and peaked at 4.155% at 1:25 PM. A huge move in 30 minutes, and indeed there was a bigger move in some of the other gilt yields, which moved up 20 bps during the day at its peak, though very much retreated back the day afterwards. The £5bn, of course, that was in the mixer here, was more symbolic and only an eighth of the size of the “black hole” - to use Reeves’ terminology - that was created by the Truss budget.
So - lots of headlines were generated but by the end of the week, a more sensible point of view took over and dragged the 5 year yields back to close just above 4% - 4.006% to be precise. Not a week we wanted, but given the news that was absorbed - not a disaster.
The Thursday close on the 5-year gilt was 3.983% yield. That corresponded to a 3.622% 5 year swap yield, which was again 36 basis points below the gilt yield. That still compares favourably to one month ago - 3.781% and one year ago - 3.952%. The 2, 3 and 5 year swaps still look very similar - whereas the 2-year compared to the 2-year one year back is a drastic difference as near-term rates have fallen. The 3.583% 2-year print is much more palatable than the 4.453% yield one year back.
How about the 30s, that are still under scrutiny? They had a similarly volatile Wednesday, but then also came back - they opened the week at 5.273% and closed at 5.358%, so still a gain (in yield) in the same region as the 5-years.
So - how do you interpret that movement this week? Personally, I think it is quite obvious. A shot across the bow. If you just think you can turn the taps on, Labour, the market will absolutely revolt, and the debt cost will crush what little growth the UK is generating at this time, and everyone’s mortgages will cost more once again. But - will it be Reeves getting to interpret this after getting her toughest time, I think it is fair to say, so far in the press this week.
That’s why the deep dive left no choice - what are the near-term economic consequences of all of this, and - indeed, will Reeves still be in power come October/November to deliver the budget? How does that affect Starmer, because losing Chancellors isn’t that easy to recover from. Who are the likely replacements and what would that mean? I was left asking myself all these questions after listening to a pod I like to consume (“The Rest is Money” - by no means do I agree with everything on there but both Peston and McGovern do a great job of covering what’s relevant, on the day) - said pod had Peston absolutely convinced that Reeves is a “goner” after Wednesday.
I disagree with Peston’s analysis or see bias in it, more accurately, quite a lot. He is inevitably political - it is impossible to be as close to Westminster as he is and not be, I think. The downside of having to consume the facts and then drop a podcast “on the day” is that it is also very easy to go over the top. He left no doubt in the listener’s mind about his position, but presumably that podcast was recorded after hours on Wednesday.
Nevertheless, as he is widely influential and well respected, and in fairness by no means alone in this position, I thought I better “go there” in this week’s deep dive. So let’s get on with it.
I commented seriously on a more jokey LinkedIn post this week, saying that I thought Reeves was having an unnecessarily tough time. She’s made the difficult decisions, Starmer has supported it, and they’ve failed to get their parties in line. She came out very early on as a fiscal conservative, wanting the “iron chancellor” role and image - and the party has kicked sand in her face and shattered that dream. We aren’t having it, on welfare cuts, they say. Now - there are political nuances here such as a very well constructed argument I did hear around how it was the specific policy that was the issue here - badly drafted, hurried, and that’s what they were against - not the ideological position of welfare cuts - but I doubt the markets believe that, to be honest.
Labour governments have several characteristics, time and again. Unemployment goes up. Planning gets liberalised. More money is pumped into the welfare side of the state. This is what the markets - dispassionate to ideology and causes - would have expected, and so far, this is what they are getting.
Most would not have expected me to come out as some kind of “defender” of Reeves, and I find myself in this position simply because I think the pendulum has swung too far. I also pick up some vibes of “a woman isn’t up to the job” - remember, we have never had a female chancellor before - and I think that’s worth noting, because ideological bias on any side has no place in a reasonable argument (and certainly misogyny doesn’t). The pictures this week told 1000 words, visibly upset because her fiscal rules are under serious pressure at this point. It was the tears that spooked the markets, I believed, because I think the markets trust Reeves an awful lot more than they trusted Kwarteng and Truss, for example. Much more predictable. Optimistic in words but not in body language. That’s what we’ve seen so far (after the misery of the budget was behind her).
Starmer has said this week that Reeves will remain chancellor for a “very long time”. Whilst this isn’t the kiss of death that many votes of confidence mean in the world of sport, for example - it does make you think that the only way he will get rid of her is if he is under pressure himself to go. Reeves is now the most unpopular senior politician in Britain with 51% having an unfavourable view versus 16% having a favourable view in a poll reported this week. The Westminster machine is speculating who will replace her.
This is part of her appeal - to be honest. The least worst option - at the very least. Pat McFadden’s hat is in the ring - the bookmaker’s favourite. Experienced from back in the Tony Blair era, he would fill the “trusted pair of hands” and retain a market-friendly approach, most of the reports think. I’ve heard him speak half a dozen times, and that’s largely what comes across, I must say. More of a nightwatchman - so think “Hunt when he replaced Kwasi Kwarteng” - not that he did a bad job, in my view - but he did also have some post-covid favourable winds behind him which just aren’t there any more, which did make the job easier.
The next in line is Darren Jones - who, if you watch question time or similar programmes, you might have come across. A very matter of fact, technocratic style would suit the role - but I don’t see him having any more party support for cuts than Reeves had. Same goes for McFadden. Simply a younger version and a symbolic change of energy, but Reeves is only in her mid-40s so that’s not really enough reason. Yvette Cooper is a longer-odds shot according to the bookies - I don’t think there’s much chance of this to be honest. She’s comfortable with the brief in the home office, and according to herself, is doing an OK job. I don’t mean that to be as flippant as it sounds - there are some measurable results from the home office that are superior to the last administration, but they have a long, long way to go if they want to stave off the Reform wave in the next general election.
Wes Streeting is there at 8/1 - simply because I think he’s seen as a bit of a golden boy and would definitely be in a future leadership contest - remember aside anything else, Starmer is 63 this year. My personal view is that he’s comfortably the most right-wing senior politician in this administration - and he might mean some stronger reforms, and some pro-business policies. He’s the one that would be the best result, but will leave a headache as to who replaces him in health. Let’s face it, you can’t rule out the fact that Reeves might crack (and has cited personal problems this week as the reason for her breakdown, although that might have been a political necessity to calm the markets - it certainly seemed to work).
Jonny Reynolds has also been mentioned and is the same price at bookmakers as Wes Streeting is. This is a different kettle altogether. The business secretary with no business experience. He speaks incredibly well, and is generously described as “ideologically flexible” - i.e. he will do what he’s told. However, I’m not sure I want Starmer telling him what he wants to do. I’d prefer a figure who added value! He’s considered to have better relationships with the “soft left” of the party - that, in my view, is the only positive he has to offer.
Torsten Bell wouldn’t go without a mention for those who remember when I used to report on him when he was the chief exec of ResF, the Resolution Foundation. He’s a more than capable economist, and having watched hours and hours of him on YouTube in the past, he’s a clear lefty, typical economist, very smart individual, but he would very much go for “more redistribution”. He’s politically very new to the game though. He’d be a huge gamble, but he’d look right in the role. I would worry most about the disconnect between his ideology and reality - but, if you looked across the country, would he likely bring better outcomes than many of the others? Absolutely. He’s one of the very few that’s absolutely got the tools to do the job, even if we might not like what he enacted.
The other names that need a mention - Anneliese Dodds, the John McDonnell choice and former shadow chancellor - let’s keep her at bay, please. Her politics are too far to the left for a chancellor in my view. Douglas Alexander is the only other one at 10/1 or less, but again I would think he’s more a night watchman style figure. Lots of policy experience which would help. Dodds would be the most left wing but isn’t in contention, the next most left wing in my view would be Bell.
So - Reeves has had the notorious vote of confidence. All should be fine, right? Unless, as I said, Starmer himself looks like he’s on the way out before he wants to go. The outright favourite in this race - in my view - is Angela Rayner. Betting markets moved this week to show a 22% probability that Starmer leaves office in 2026 and that there’s more chance of him leaving in 2025 than serving the full term, here, which is disquieting. I think the best summary there is that most of the outcomes are fairly even in probability as far as the betting markets see it, so no-one really knows what’s going on - but that speculation is that him leaving early is “worth a punt”.
Starmer is certainly ruthless enough to sacrifice Reeves if he had to. You don’t get there without that sort of mentality, so whilst he can sometimes appear a bit weak, I think that’s more his demeanour than a fair reflection of his true appetite to retain power. The other name that would make it anything other than a penalty kick for Rayner is Wes Streeting - often touted as a future leader and - as and when we get there - if they both decide to run, I’d be stunned if they weren’t the final two. However - I’ve been stunned before in leadership contests and dark horses do come out of the field.
Let’s just revise the process here. In order to elect a new Labour leader, 20%+ of MPs would need to put their heads in the stocks, which is more than 80 people, to force that process. Any candidate needs nominations from 20% of MPs to enter the ballot - and 5% of CLPS (constituency labour parties) or three affiliates representing at least 5% of affiliated members, including 2 trade unions. All party members then get a vote - party members, registered supporters and affiliated members. Instant runoff is used - voters rank candidates by preference, and after preference transfers, the first candidate over 50% wins.
It’s quite a different process from the Conservative party one, which we are much more familiar with in recent years. We won’t see 8 or 10 or 12 candidates and rounds and rounds of voting. I’m not really sure there’s another significant candidate at this point - so perhaps just a few thoughts over who their chancellor might be, if Starmer does indeed take the knives to the back.
Rayner would no doubt be more left wing and the darling of the party. The voting system almost guarantees her victory, in my opinion, if she was to stand. She’s the second most popular labour figure, only behind Andy Burnham, Mayor of Greater Manchester (who would need a well-timed, soft, by-election victory if he was even going to consider the job - and it really isn’t clear that he would). Ang is definitely different, and would offer a “true left wing alternative” according to the press - and yes, I think she would.
We’d expect, economically, more welfare, more cost-of-living relief, and more public investment. For that we’d need another change in the fiscal rules, or an outright breach of the manifesto promises (which, frankly, is one of the things that does need to happen now anyway. Just put income tax up, and be done with it - it was 32% at the basic rate a few years ago, and we can’t afford 28% - lower savings will buffer most of it at the moment - just get on with it. This is a key even if Reeves stays, but much easier for Ang of course).
Who would do the dirty work on all that in number 11 then? Miliband, since he comes from the soft left? Disaster, I know. I don’t think the markets would like that very much at all. Jonny Reynolds, since he’d do what he was told? I’d be very very concerned about the lack of economic savvy between the pair of them. Yvette Cooper, a female double-team? Possibly. Would fit the bill of “about as right (for a leftie) as Ang could handle, but sends a good message to the markets” - if the markets only make their judgements based on how far right or left a politician is (which is mostly true - of course what they are really looking at is how fiscally conservative - or not - that politician is).
Not a roll call that will cheer anyone up, I don’t think. This is why I say be careful what you wish for. One more change in the fiscal rules - to support further investment - and perversely enough, the one area she could then define is social housing, and making that a critical part of infrastructure - which might be one of the best things that anyone ever did for the country in the medium term. Strange how these things work out. Don’t worry, I’m sure I’d also have plenty to moan about - sorry, I mean analyse.
- Worst bit down, I’d say. How about Wes? Third in the pecking order of popularity behind Rayner. Openly supports the New Labour pro-business approach. Innovation, education reform, and growth. Streeting sits aside Cooper as the second favourite, but I don’t see Cooper as that likely in comparison. What would the message be to number 11? Fiscal responsibility alongside structural reform. Much better for bond yields, I can tell you that.
Less welfare, more tax incentives for investment in education and skills, pro-business, pro-market. Doesn’t sound all that Labour, does it? That’s the trouble - he’d have to have a Blair-like grip on the party if his moment in the sun really did come. He looks to have that potential, but we’d only find out when this hypothetical actually plays out, if it does.
Wes’ choice for number 11, then?
Pat McFadden and Darren Jones would again be strong candidates, I think. McFadden - Blairite outlook - tick. Stability and stewardship. No sudden lurch - so, investors, don’t worry we are not introducing uncertainty here. That would help. Jones would be more of a “next generation, new ideas” sort of candidate, and this would likely depend on whether Wes himself has a clear idea of the sort of chancellor he would want. One we haven’t mentioned yet might be Bridget Phillipson - also a centrist, keen on detail, bringing her passion for education to the second biggest job of all? An outsider, but worth a mention. For the sake of it, I might as well mention Jonny Reynolds again, although I’d hope that Streeting actually knows he isn’t up to the job, he just goes to the opening of every political envelope. A poor man’s Michael Gove, would be my assessment.
I’ll be interested - as always - in readers and listeners’ thoughts, because these are only a summary of my own, and I’m by no means a political analyst. I’m much more concerned about the economic direction, and anyone other than a fiscal conservative, until we have a clear growth path and have put shocks to the system behind us, would be a bad move for the country in my view. It hurts everyone by putting the cost of debt up, in terms of having less money to spend on Government services, and in terms of having to pay higher mortgages at the personal level. Even for those who don’t own a home - this hurts just as hard or harder - a rental is far more likely to have an interest-only mortgage than a residential property, and a rental always has a premium attached to that mortgage rate versus a homeowner.
I’m sure you will be more on my side after that, though - be careful what you wish for! As we are at the close, after a successful workshop delivery this week, the next one is not yet online although the date is set if you want to save it - Wednesday October 1st 2025. Central London. The subject matter - Investment metrics, and what’s really important - something that the entire industry at the entry/base level seems to get wrong, year in, year out. The metrics that Rod and I use ourselves in our businesses.
We also have a space at the moment in our Boardroom Club - we meet once a month to run through your property businesses, challenges, and what’s stopping you from growing - it’s a programme that runs for a minimum of 12 months and kicks off with a deep dive with just Rod, myself, and you to formulate a proper strategic plan for the coming year. If you’d like a no-obligation chat about it, please let me know via a comment or a direct message.
Above all - please remember to Keep Calm, ALWAYS listen to or read the Supplement, and Carry On; there will be opportunities abound this year and towards 2030 - the risks around at this time, while they feel significant (the geopolitical ones) are far less meaningful to the UK housing market than they have been for several years - of that I have no doubt. Prices are on the up…….Good luck!
