As soon as the General Election was called, it became clear that the second half of the year would see a surge in recruitment in House building. Therefore it is not a surprise that vacancies in Real Estate in July hit record levels. Whilst the Conservatives had tried to implement mandatory house building targets under Gove, such was the resistance from their core constituencies, it was soon dropped. For the Labour Party, they have no such constraint, and as a result, have reinstated the target, and increased it. For London and the South East in particular, it promises to be a busy time. The Green belt has long been a cause of contention, now the Labour Party wants to rewrite the rules on planning, when it comes to the green belt to maximise available land for building.

Similarly, the plan to scale up villages and towns is arguably quite revolutionary. For example, take the village of Tempsford, (population 600) situated half way between Oxford and Cambridge, and just as importantly, on the main rail line linking London and Edinburgh. As a result it has already been identified as a prime location for house building by the National Infrastructure Commission, and options have now been acquired to build 7,000 new homes here. This is exactly the kind of expansion that the Tory shires have resisted, equally if the UK is to balance the demand for housing, with the supply, it is the South East where it needs to happen. For context, after the second world war, when the UK last went on a massive house building project, the only towns to meet population targets (with the exception of Warrington) were in the South East. With that, the Labour party seems to be in a hurry and in no mood to compromise. The size of their majority means they don’t need to either.

What does this mean? Expect Residential House Builders to surge in hiring. Already there are issues to do with skills shortages, so this is an area where business and government will need to align. It could be we start to see fast track apprenticeships for the construction industry to meet the demand. With the new salary requirements now putting a lot of jobs beyond the reach of visa sponsorship, it could well be that this is the biggest constraint to hitting the targets. At the same time, people aged 18-24 not in education, employment or training is now hitting record levels. In under two years, the total of 18-24 year olds in this category has risen from 10.8% to 12.6%.

For commercial property, the situation is more complex. London does not have the draw it once had and the impact of the pandemic, with people wanting hybrid working, is meaning the demand for office space is changing. HSBC have now announced plans to leave their Canary Wharf tower and arguably the introduction of the Elizabeth line is changing the district, as people no longer need to work and live in the district, they can base themselves in a more classical residential neighborhood and quickly commute. What happens next with the Qataris will be crucial as the amount of funding needed to update the district and modernize office space to meet current demand, is eye wateringly high. Otherwise the district risks a slow bleed, as more and more businesses move out. The history of London is that it always finds a way, equally this time, it may well be the Government has to reintroduce the kind of special zoning it did, when Thatcher launched the Docklands initiative over 40 years ago to preserve the district as we know it. Time will tell.