How being the UK’s Prime Minister became ‘the impossible job’

There was a time when the England men’s football manager was widely regarded as having the most difficult job in the country. Expectations were sky high, patience was in short supply, and every decision was analysed from every conceivable angle. 

As we sit in the middle of another World Cup summer, however, it might be time to hand that title to somebody else, because from where I’m sitting, the role of Prime Minister appears to be the ultimate impossible job. 

With Sir Keir Starmer announcing his resignation, the UK is currently preparing for its seventh Prime Minister in just ten years. That is a remarkable level of political turnover when compared with the relative stability of previous decades - five Prime Ministers in the preceding 37 years - and it raises an important question. Are we living through an extraordinary period of political turbulence, or is this simply the new normal?

Earlier this year, in Financial Reporter, I wrote about how volatility appears to have become a permanent feature of the buy-to-let and wider housing markets. Unfortunately, events over the last decade or so, suggest the same conclusion may apply to UK politics as well.

Markets and landlords both value certainty

As I write, Labour MPs are currently debating whether there should be a full leadership contest or whether the widely expected frontrunner, Andy Burnham, should effectively be handed the role. There are arguments for both sides.

A leadership contest would allow for a wider discussion about the future direction of Government policy, including housing, planning, taxation and economic growth. Given the importance of these issues, there is certainly value in having that debate.

The downside is that the time spent debating will create further uncertainty.

Financial markets have never been particularly fond of the unknown, and neither have other stakeholders, but specifically in our sector, landlords making long-term investment decisions. A swift transition to a new PM would at least provide clarity more quickly, even if questions remain about the precise direction of future policy.

A prolonged contest stretching through the summer would mean more speculation, more uncertainty and potentially more volatility. Of course, Starmer will remain Prime Minister until a successor is chosen, which provides a degree of continuity. However, it seems inevitable that a new leader will want to place their own stamp on Government policy, particularly in areas such as housing.

What could this mean for the private rental sector?

For landlords therefore, the bigger question is not necessarily who becomes PM, but what happens next? The PRS and buy-to-let markets have already experienced a huge amount of change in recent years. 

Tax reforms, affordability pressures, licensing schemes, EPC requirements and the Renters' Rights Act have all contributed to a market that is considerably more regulated and considerably more complex than it was a decade ago. The direction of travel appears unlikely to change.

Regardless of who occupies Number 10, there is little evidence that governments of any particular colour are going to become less interested in regulating the PRS, although Reform has said it will attempt to travel this route. That said, the next General Election is at least two years away, unless the new PM throws a real curve ball and calls one.

We should also point out that any changes made do not automatically have to be negative. Good regulation can improve standards, increase professionalism and provide greater confidence for tenants. However, landlords also need certainty.

Making investment decisions, improving properties, expanding portfolios and planning for the future becomes significantly more difficult when the political, regulatory and economic landscape remains in a constant state of change.

One of the biggest risks is not regulation itself, but uncertainty about regulation.

We have already seen this with EPC proposals where many landlords recognise change is coming but remain unsure about exactly what form it will take, when it will arrive and what the eventual cost might be.

Stability matters more than ever

The challenge for any incoming PM is the PRS remains a vital component of the UK's housing system. At a time when housing demand continues to outstrip supply and affordability remains stretched for many would-be homeowners, the sector provides homes for millions of people.

Landlords, tenants, lenders and advisers do not necessarily need Government to stand still. What they do need is a clear sense of direction and a realistic framework within which they can make long-term decisions. That is why stability matters.

The buy-to-let market, and landlords specifically, have shown remarkable resilience over the years and adapted to every challenge thrown at them. However, resilience should not be mistaken for an unlimited capacity to absorb uncertainty.

Whether Andy Burnham becomes Prime Minister through a swift transition or following a longer contest, one thing seems clear. The next Government will inherit a housing market and PRS that increasingly values certainty, clarity and consistency. Unfortunately, those are qualities that have been in rather short supply for some time. Let’s hope that can be changed, regardless of who secures the reins to power.