Amidst a catastrophic week for Boris Johnson which saw the best part of 60 MPs resign from his government in the two days leading to his resignation, the Prime Minister took it upon himself to relieve Michael Gove – the now former Secretary of State for Levelling Up, Housing and Communities – of his duties.
This was a startling exercise of prime ministerial power: despite himself and Gove being midway through a promising review of the housing market and mortgage finance, and despite the ceiling caving in on Johnson, he still did not hesitate to dispatch of Gove – a powerful and popular Conservative in his own right.
Into Gove’s shoes stepped Greg Clark, who has previously held several ministerial roles – including that of Housing Secretary from May 2015 to July 2016.
Also joining the merry-go-round at the Department for Levelling Up, Housing and Communities (DLUHC) was Marcus Jones, who replaced Stuart Andrew as Housing Minister on Thursday night. Jones said that it was an “important and challenging brief”, adding that “[I am looking] forward to giving all my energy and attention to this demanding role”.
Some will no doubt question whether this political upheaval will influence house prices. Anthony Codling, CEO of twindig, said house prices are “largely indifferent” to political turmoil. He added:
“If history repeats itself, the house price growth may plateau whilst a new Prime Minister is found and perhaps until we have had an election to confirm the incoming PM’s mandate to lead and govern our country. Many will forecast house price falls, but we expect house prices to neither move significantly up nor down whilst the current political storm calms down and the dust settles.”
Codling also painted a similar picture with regards to transactions:
“The best lead indicator we have for housing transactions is mortgage approvals – a mortgage approved today typically leads to a housing transaction in 3-4 months’ time.
At the risk of bruising politician’s egos, the housing market data suggests that the level of housing market activity takes very little notice of what is going on in the Westminster bubble.”
The below graph seems to confirm Codling’s argument:
Policy-wise, it remains to be seen whether the new-look DLUHC can further the impetus of Gove’s tenure. Gove – along with Johnson – was in the midst of a wide review of mortgage finance and the housing market. The impact that Gove’s departure will have on housing policies such as the return of right to buy, the building of new houses, leasehold reform and cladding remediation remains to be seen. However, with Johnson staying on until the Autumn, it is hoped these initiatives will not be lost in the forthcoming avalanche of change.
Nathan Emerson, chief executive of Propertymark, hopes to “maintain momentum” despite the change. He said:
“We have previously met Greg Clark when he held the equivalent position in what was DCLG.
The hope from having someone with this experience is that he will be able to maintain momentum on important issues such as renters reform, leasehold, building and fire safety requirements and regulation standards amongst property professionals.”
A potential benefit of Gove’s departure mooted by the Home Builders Federation is a “resetting” of the relationship between the government and the development industry, with a spokesperson adding that “Greg Clark needs to refocus on policies to facilitate housing supply and avoid any delay in key policy decisions”.
The changes in Westminster – and No. 10 Downing Street – are far from concluded, however. It is believed Johnson will remain in post as Prime Minister of the United Kingdom until Autumn.
Whether he is able to hold the role until the Autumn as a caretaker remains to be seen, with reports suggesting that his party will attempt to unseat him as soon as possible. In any case, a fierce leadership battle is likely to ensue over the coming weeks.
