The run-up to Thursday 18 September was tense, to say the least. 3.62 million Scots turned out to vote for or against an independent Scotland, and market predictions in the event of a ‘Yes’ vote ranged from a run on the pound to the collapse of the UK economy.
The ‘No’ camp edged it by just over 10%, however, and the markets quickly calmed, with sterling even enjoying a short-lived spring in its step. The boost was only brief, though, thanks to lingering long-term doubts about the UK’s political future 1.
In order to convince Scotland to stay, Westminster made many last-minute concessions which included further devolution of powers to Holyrood, the home of the Scottish Parliament in Edinburgh.
The promise angered many Tory backbenchers, who believe that the concessions are disproportionate. As there is no devolved English parliament, English MPs cannot vote on matters that affect Scotland and Wales in the same way that Scottish and Welsh MPs can vote on matters that affect England.
Perhaps in response to the cold reception from his back bench, Prime Minister David Cameron alluded also to further independence for Wales, Northern Ireland and, indeed, England 2. This puts a federal UK, made up of four separate parliaments, on the cards, and the decentralisation might not stop there: with many feeling that there is an unfair bias in Westminster towards London and the Southeast 3, the way may even be paved for an England made up of nine separate regional parliaments.
The political implications for a UK with a devolved English parliament are somewhat similar to the implications for a UK without Scotland. South of the border, Tory MPs have a 56% majority, and Labour’s powers in a devolved England would be greatly diluted 4.
This could have tremendous implications for education, health and welfare – policies that traditionally divide the parties – but what about housing?
Both parties have made known their commitment to boosting the construction of affordable homes. The Tories have aimed to do this through broader economic recovery, relaxing planning laws, and their controversial Help to Buy scheme (which Labour opposes). Labour hopes to do this through loosening the financial restrictions imposed upon local authorities and targeting private developers hoarding undeveloped land with compulsory purchase orders 5.
But the housing policies of both parties are less entrenched in their core ideologies, and therefore less likely to remain unchanged for the next parliamentary term. By 2015 – the election in which these policies will be brought to bear – the electoral system will remain much as it is, and so the future for the English housing market is no clearer than it was before the Scottish vote.
The Scottish housing market, on the other hand, is expected to rebound from the slump it experienced in the run-up to the referendum. According to Knight Frank Scotland’s Ran Morgan, the buyers and sellers who put off making decision until after the vote will underpin not only a recovery, but a marked increase in activity 6.
In April 2015, Scotland will also see Stamp Duty Land Tax (SDLT) replaced with the more progressive Land and Buildings Transactions Tax (LBTT). Mr Morgan observes that the new regime might penalise those buying more expensive homes, potentially curtailing business at the higher end of the Scottish market 7.
Nevertheless, Knight Frank predicts a 3% increase in house values in Scotland by the end of 2014 and a further 3–6% increase in 2015 8.
- 1. http://online.wsj.com/articles/british-pound-rises-as-scotland-rejects-independence-in-referendum-1411078352
- 2. http://www.ft.com/cms/s/3/8dd586bc-3fc5-11e4-a381-00144feabdc0.html#axzz3E3IfDTJE
- 3. http://www.theguardian.com/commentisfree/2014/jan/24/devolve-power-to-englands-regions
- 4. http://www.economist.com/blogs/blighty/2014/09/labour-and-english-only-votes
- 5. http://labourlist.org/2013/06/housing-is-now-at-the-heart-of-labours-agenda-for-2015/
- 6. http://www.knightfrankblog.com/global-briefing/news-headlines/scottish-referendum-what-next-for-the-property-market/
- 7. ibid
- 8. ibid