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'A Choice Between Someone Who Says F*ck Business Or Someone Who Will F*ck Business': What Theresa May’s Departure Means For Real Estate

Soon-to-be former Prime Minister Theresa May

Theresa May’s departure from Number 10 leaves a vacancy at the top of British politics at one of the most politically tumultuous moments of postwar British history.

So far, Brexit has not been nearly as bad for London and UK property as was originally feared. But May’s departure and the election of a new prime minister, with Boris Johnson the bookies’ favourite, could easily change that.

Four experts outline how the latest upheaval might impact the UK real estate sector.

Mark Robinson, Property Director and co-founder, Ellandi

“It’s hard to see how our current political turmoil doesn’t end up in a general election by the end of the year. Usually this would bring some clarity or, dare I say it, ‘stability,’ but I am hugely skeptical that either main party offers a road map out of this self-inflicted mess we are in.
The property industry should be ambivalent about the usual centre-left or centre-right choices, but this will not be offer from either party.
We deserve a better choice than someone who says 'f*ck business' or someone who will f*ck business."

Mike Hussey, Chief Executive, Almacantar

“I am totally disinterested. The best medium-term outcome would be a coalition government that means only essential business gets dealt with and the ‘tinkering’ is left out. That gives business a chance to make decisions to invest and divest within the same fiscal framework. Majority governments tend to disrupt the investment cycle.
In all other respects, the property industry makes very long-term decisions that span multiple governments, and we have got used to adapting to the rules set by the ‘short-termists’ at the wheel.”

UK Prime Minister Boris Johnson

Walter Boettcher, Director of Research and Forecasting, Colliers International

“UK commercial property looks to be driven more by financial indicators than political announcements. Sterling will be key. So far the announcement has not moved sterling much. Many opportunistic investors have been waiting for more turmoil and a possible hard Brexit in anticipation of weaker sterling and a buy opportunity. It is looking increasingly like this is already priced in given the limited sterling shift.

Who would be best for commercial property? Whoever is most likely not to tinker with the tax and regulatory structures that relate to domestic and cross border investment. There is possibly some comfort in knowing that commercial property is not usually a direct policy target, but more often is overlooked and impacted indirectly by policies aimed at other targets. In this respect, it may not matter much who gets the tap on the shoulder, although the property sector would benefit from someone who is aligned with our chancellor in the hopes of continuity.

I suspect that Boris may get the tap. Did I read that he is selling his London home?  Let’s not read too much into this. 

I would venture to say that there are some other issues that could impact property, not least of which is Huawei and the 5G episode. The Chinese have apparently intimated that future UK investment could depend on how this is handled, all the more worrisome given the growing U.S. blacklist. We need someone who had the skills to do this balancing act. I’m not sure any of the possibles are up to this level of statecraft. It may be that part of the battle between the U.S. and China may have repercussions in the UK. This could have a direct impact on UK property.”

Faisal Durrani, Associate, Commercial Research, Knight Frank

“One of the inevitable scenarios has played out and we move onto yet another phase of uncertainty in the Brexit process. For the commercial market in London, investors are less concerned about which way Brexit goes, but what they do seek is political certainty, which has been very much lacking and this announcement will certainly send out some uncomfortable signals.”