Industry reacts as Sunak becomes prime minister
Rishi Sunak has been confirmed as Conservative Party leader and is set to become prime minister after rival Penny Mordaunt withdrew from the leadership contest.
The former chancellor had secured the backing of more than half of the parliamentary Conservative Party, while Mordaunt had around 30 declared supporters. Boris Johnson pulled out of the race last night, despite claiming to have passed the 100-MP threshold.
Launching his bid at the weekend, Sunak said: “We face a profound economic crisis… I want to fix our economy, unite our party and deliver for our country.”
He added: “I served as your chancellor, helping to steer our economy through the toughest of times. The challenges we face now are even greater. But the opportunities – if we make the right choice – are phenomenal.”
Sunak said he had a “clear plan to fix the biggest problems we face”, while positioning himself as a continuity candidate who “will deliver on the promise of the 2019 manifesto”.
He added: “There will be integrity, professionalism and accountability at every level of the government I lead and I will work day in and day out to get the job done.”
Industry figures have called on Sunak to confirm his leadership team as soon as possible and set out a clear strategy for stabilising the economy.
Melanie Leech, chief executive of the British Property Federation, said: “The last few months have damaged the UK’s international reputation and economic standing, the country urgently needs strong and competent leadership to rebuild confidence.
“The new prime minister needs to confirm his leadership team as soon as possible and provide clarity on his strategy for stabilising the economy and his policy priorities.
“The property industry stands ready to work with Rishi Sunak in creating a thriving economy and addressing regional inequalities through the delivery of new homes, work and leisure spaces that are essential to revitalising our towns and high streets.”
Adam Coffer, chair of the Property Owners Forum, added: “Frankly, there is a palpable sense of relief that at least the latest shambles is over for now. Now it is time to focus on the existential threats facing property owners. We hope Rishi’s track record and sentiment demonstrates that, finally, there may be some empathy from government that property owners are every single one of us up and down the country – through our pensions, local authorities, charities – and not simply cigar-chomping, pin-striped barons, private equity giants and enormous REITs.
“There are some clear strategies that would both assist the property industry and, in turn, generate growth—but the key challenge, one senses, will be overcoming the factions within his own party before we can see these implemented.”
Vivienne King, chair of the Shopkeepers’ Campaign, said: “Rishi Sunak has won praise from his peers for his economic credentials, but we are waiting to see if he can be the champion of the high streets that he presented to Conservative voters during the hustings. As the medium-term fiscal statement approaches, he can prove his commitment to high streets and town centres and the neighbourhoods who depend on them, as a first step by abolishing downwards transition and by stopping rates going up at the rate of inflation.”
Walter Boettcher, head of research and economics at Colliers, said that “Sunak represents the strong economic hand that is needed to steady the seas and bring confidence back to the UK markets”.
“Unifying the Conservative Party on the other hand will prove more challenging to the new PM given recent history,” added Boettcher. “Doubling down on the much delayed ‘levelling up’ agenda might be one way forward given its central role in the 2019 Conservative Manifesto. Public finances will of course remain constrained. Hence, fostering public private partnerships to progress this agenda will be key.
“Such partnerships were always key and offer great opportunities for UK real estate as it navigates its way through a period of volatility and uncertainty, especially in the very regional markets that have the greatest to gain from levelling up. Let’s wish the new PM every success.”
Grainne Gilmore, director of research and insight at Cluttons, said: “Today’s appointment of a new prime minister is a much-needed step away from the political instability of the last few months.
“There are still economic headwinds ahead, but a clear and sustained message on how policymakers are going to tackle these challenges should help calm the money markets and improve sentiment. This could have a material knock-on impact on the pricing of loans as a reduction in political upheaval allows gilt rates to fall and interest rate expectations to be revised down.
“The next hurdle is the Budget next Monday, but if there are no major surprises, there will then be an opportunity for politicians to get back to business as usual, something which the markets and businesses will welcome.”
Ryan Jones, partner in rating, also at Cluttons, said: “It will be interesting to see who Rishi will appoint as chancellor, as now is the time to help them flourish and enjoy a prolonged period of operation during a time when the British public are embracing physical retail and getting to grips with the return to the office.
“We believe smaller businesses should take priority, but we must also not forget the pension funds and public sector bodies that also own and occupy real estate and who have a duty to ensure finances are protected to support real people in the long term.”