An election where property matters

News

Damian Wild

17 April 2010

On Tuesday, at the annual Heron lunch at the Dorchester, Ronson was in a different mood. He told his 400 or so guests how his tower was hitting the market at the right time. But he also warned of trouble ahead. “The property developer is not extinct but on the endangered list,” he told an audience perhaps more eclectic and influential than any other that gathers to celebrate property’s influence.

Ronson called on banks to lend and the government to stop penalising entrepreneurs. “It wouldn’t take an awful lot for us to slip back into recession,” he cautioned (p38).

Two-tier country

But more chilling was the conclusion he has drawn from his famous “Saturday job” – a weekly 12-hour drive around the country visiting the petrol stations that Heron still operates.

“I don’t like what I see,” he said. “We’re creating a two-tier country where I fear the effects of significant unemployment will be social unrest.”

Let’s hope he’s wrong about that. But he is already right about the two-tier nature of the country in terms of property. The gravitation towards prime-based properties in the South East from an investment perspective shows no sign of abating. A London-centric economic recovery would similarly drive a wedge from an occupier perspective too.

It’s an issue we’ll be raising with party spokesmen, as well as publishing their answers to questions that have flooded in from readers. Yes, it may be an exaggeration to say property is at the heart of the three parties’ manifestos, published this week, but for the first time in a while it feels like property matters in an election (p38).

Scratching beneath the surface

In a real estate context it is mentioned just twice in the Labour tome, which pledges to cut “property running costs”. The Liberal Democrats also cite it twice, both in a residential context, and not least in support of their proposed mansion tax. The Conservatives manage four acknowledgements, advancing the cause of home ownership and highlighting public sector property cost savings.

But it’s worth scratching beneath the surface. Interestingly the much-discussed Tory proposals to grant the right to third-party appeals – which failed to find favour among even some of the party’s own senior lieutenants – have secured LibDem support.

It’s tantalising to think whether and how this unlikely alliance will play out in the event of a hung parliament. And as much as (unwise) property (lending) got us into this mess, property is at the heart of many of the ways the parties are seeking to get us out of it – from curbing state expenditure and realising equity through asset sales to the creation of a planning system designed to spur development.

So there may be only eight mentions of property out of the more than 80,000 words hurled at the three manifestos. But this time they may just matter.

What a difference 24 hours makes. On Monday, Gerald Ronson stood on the 46th floor of the Heron Tower, topping out a building of which he says: “If it does become my legacy, it’s not a bad legacy to have.” And he’s right. Ronson is delivering the tallest building in the City at a time when most of his competitors have retreated from such public displays of confidence. Consequently, it’s arriving in a recovering market that will soon be starved of new stock. On Tuesday, at the annual Heron lunch at the Dorchester, Ronson was in a different mood. He told his 400 or so guests how his tower was hitting the market at the right time. But he also warned of trouble ahead. “The property developer is not extinct but on the endangered list,” he told an audience perhaps more eclectic and influential than any other that gathers to celebrate property’s influence. Ronson called on banks to lend and the government to stop penalising entrepreneurs. “It wouldn’t take an awful lot for us to slip back into recession,” he cautioned (p38). Two-tier country But more chilling was the conclusion he has drawn from his famous “Saturday job” – a weekly 12-hour drive around the country visiting the petrol stations that Heron still operates. “I don’t like what I see,” he said. “We’re creating a two-tier country where I fear the effects of significant unemployment will be social unrest.” Let’s hope he’s wrong about that. But he is already right about the two-tier nature of the country in terms of property. The gravitation towards prime-based properties in the South East from an investment perspective shows no sign of abating. A London-centric economic recovery would similarly drive a wedge from an occupier perspective too. It’s an issue we’ll be raising with party spokesmen, as well as publishing their answers to questions that have flooded in from readers. Yes, it may be an exaggeration to say property is at the heart of the three parties’ manifestos, published this week, but for the first time in a while it feels like property matters in an election (p38). Scratching beneath the surface In a real estate context it is mentioned just twice in the Labour tome, which pledges to cut “property running costs”. The Liberal Democrats also cite it twice, both in a residential context, and not least in support of their proposed mansion tax. The Conservatives manage four acknowledgements, advancing the cause of home ownership and highlighting public sector property cost savings. But it’s worth scratching beneath the surface. Interestingly the much-discussed Tory proposals to grant the right to third-party appeals – which failed to find favour among even some of the party’s own senior lieutenants – have secured LibDem support. It’s tantalising to think whether and how this unlikely alliance will play out in the event of a hung parliament. And as much as (unwise) property (lending) got us into this mess, property is at the heart of many of the ways the parties are seeking to get us out of it – from curbing state expenditure and realising equity through asset sales to the creation of a planning system designed to spur development. So there may be only eight mentions of property out of the more than 80,000 words hurled at the three manifestos. But this time they may just matter.