If Labour came to power it could have far-reaching implications for the property industry. Here’s what you need to know:
1. There is now near political consensus on restricting overseas investment in UK housing
Shadow chancellor John McDonnell said he wanted to crack down on “property speculation”, which shadow international trade minister Bill Esterson later clarified as a restricting foreign investors from buying homes. The previous week Liberal Democrat leader Vince Cable called for a “fierce” tax on overseas residents buying property, days after foreign secretary Boris Johnson wrote an article suggesting a similar tax should be introduced after Brexit.
2. Property developer = “property speculator” in Labour lingo
Labour leader Jeremy Corbyn and shadow chancellor John McDonnell repeated the accusatory label for the industry in their keynote speeches as they announced policies to restrict foreign investment into UK housing and “use it or lose it” rules to clamp down on so-called landbanking.
3. Grenfell Tower has charged the debate around the delivery of more social housing
The tragic fire in Kensington was repeatedly invoked during conference speeches as a metaphor for a broken housing and political system. “When tenants at Grenfell, and more widely, as other sections of our country do, feel marginalised and ignored, things must change,” said shadow housing secretary John Healey. Labour has announced a review of social housing policy, planning, building regulation and management, which will report back to the party conference next year.
4. Regeneration would be significantly tougher under Labour
Labour would enforce a tenants’ ballot that would allow residents affected by prospective regeneration plans to vote on whether the development should go ahead. Corbyn also said there would be “no social cleansing, no jacking up rents, no exorbitant ground rents”. The policy is stronger than mayor of London Sadiq Khan’s own estate regeneration rules, which says returning social tenants must have the “same or similar” rents.
5. Labour would campaign for a Brexit deal with retained single market access
Jeremy Corbyn pledged to negotiate a Brexit deal with the EU that “guarantees unimpeded access to the single market” if elected. The Labour leader avoided a debate on the topic after a members’ ballot rejected the motion. However, during the conference, shadow Brexit secretary Sir Keir Starmer said Labour could keep the UK in a form of customs union with the EU and negotiate a new single market relationship after withdrawal.
6. The party wants to nationalise water, energy, rail and Royal Mail but those industries could be just the start
Shadow chancellor John McDonnell also said in a BBC interview that Labour could nationalise the construction industry. Construction was not an industry later earmarked for nationalisation in his conference speech, but his earlier interview suggests it is on the cards. Mark Farmer, chief executive of Cast and author of a government-commissioned review into the construction industry, said nationalisation could “stifle” innovation by “supporting only a handful of technologies and systems, disincentivising new disruptors from entering the market.”
7. Geographical divisions in the party have overtaken ideological ones, at least on the surface
Greater Manchester mayor Andy Burnham vocally criticised the Labour Party conference for being too “London-centric” after he was not given a speaking slot on the main stage. However, Corbyn pledged to create an industrial strategy to ensure employment growth in “every region” in the country. The party leadership also pledged infrastructure investments including “Crossrail for the North”, an extension of HS2 in Scotland, funding for Midlands Connect and electrification of railway lines from Cornwall to London.
8. The financial system could look very different under Labour
“To reconnect the financial sector to the economy of research and development and production, we will transform our financial system,” McDonnell said. State direction of innovation and investment would promote “vital areas of expertise” in robotics, electronic cars, cleantech and the smart city. If elected, Labour would a establish a “strategic investment board”, comprising the chancellor, secretary of state for business and governor of the Bank of England to co-ordinate the promotion of investment, employment and real wages.
9. The property industry needs to address its image problem
Responding to the Labour Party conference, Linklaters’ global head of real estate Andy Bruce said the sector’s greatest challenge is justifying the role it plays in society. He said: “It does not take a giant leap of imagination to see the real estate industry becoming a pariah, in much the same broad-brush way that investment bankers were labelled post-GFC. That is a far more serious challenge than the others I mention above, since it would go to the heart of how the real estate industry is valued and heavier regulation and oversight of our industry would be sure to follow.”
10. The time to engage is now
Labour is seeking to build on its manifesto, which was rushed together in 6-7 weeks before the snap election in June. As policy discussion groups take place to build on the policies set out in the manifesto, the time to influence Labour strategy is now.
Click here for all our coverage of this year’s party conferences.
To send feedback, e-mail Louisa.Clarence-Smith@egi.co.uk or tweet @LouisaClarence or @estatesgazette
