"When it comes to housing, resolving the issues in planning needs to be one of the top items on the next PM’s agenda"
In her acceptance speech, Truss promised 'a bold plan to cut taxes and grow our economy', with many suspecting she will announce new policies within the next week - including tackling the cost of living crisis.
We've rounded up some of the industry's responses to the news:
Nick Leeming, chairman of Jackson-Stops, comments:
“Stability is key for a healthy economy and housing market - I hope that Truss will put a stop to the Housing Minister merry-go-round we’ve seen over the last decade. There remains an imbalance between housing supply and demand for both buyers and tenants, so we look forward to a more normalised marketplace. We need consistent policies to achieve this.”
Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown:
"Some of the promises Liz Truss has scattered on the campaign trail may flutter away once she takes office and the cold reality of the monumental crisis the government faces becomes clear. Trussenomics policies risk creating a fresh tangle of problems for the UK economy, just as the energy crisis has intensified. Slashing income taxes, corporation taxes and direct taxes like VAT while also dangling the pledge for extra help for households facing punishing energy bills risks pushing the country much further into the red at a time when the country’s debt pile is already mounting fast."
Frédérique Carrier, Head of Investment Strategy at RBC Wealth Management, said:
“PM Truss will likely be less keen to balance the country’s books than former Chancellor Sunak would have been, and interest rates are likely to increase further during her premiership.
“PM Truss seems less fiscally conservative than former chancellor Sunak. She now seems to be in favour of supporting the economy other than through tax cuts. This ultimately means higher borrowing, and in turn it means the Bank of England could be forced to increase rates further than otherwise would have been the case.
“For now, we expect the Bank of England to deliver two 50bps rate hikes at its meetings on September 15th and November 3rd as economic data has not deteriorated sufficiently yet to prevent it from being hawkish.
“We still expect the UK economy to weaken materially going forward, but we don’t expect the labour market to weaken enough to prompt a return to a slower pace of tightening in November. A larger 75bps rise is possible at the November meeting but will likely depend on whether inflation surprises on the upside and the fiscal plans of the new UK government.
"PM truss is less likely to repair the trading relationship between the UK and the EU than PM Sunak might have been. She broke off talks with the EU regarding the Northern Ireland protocol earlier this year, preferring to take unilateral action. Such a hard stance on this issue could ultimately lead to a trade war with a region which remains the UK’s main export market. This would be problematic given the already weaker UK economy.”
Simon Cox, Managing Director of Walter Cooper:
“When it comes to housing, resolving the issues in planning needs to be one of the top items on the next PM’s agenda, and that will mean making some unpopular decisions. Truss now needs to shift her focus from pandering to the NIMBY masses and publicly turn away from previous statements made by other Conservative MPs such as Michael Gove, regarding the so called ‘cartel’, or face alienating the housebuilding community entirely. However, with a general election likely on the horizon I’m doubtful these difficult choices will be put into action any time soon.
“Housing plays a major part in supporting the economy, and as we head into a predicted recession this will prove more important than ever. I’d therefore implore the new PM to work with those in the industry to provide support in promoting an ‘open for housebuilding’ agenda. Truss may have pledged her commitment to removing planning restrictions in an attempt to boost housebuilding, but in abandoning the government target of building 300,000 houses a year, will her so called ‘investment zones’ ever really come to fruition? I’m not sure, but the fact of the matter is, as prices continue to rise due to a lack of supply, something needs to be done to increase the number of houses built in this country before home ownership becomes further out of reach for all but a select few.”
