So Keir we are - how will a Labour government affect (property) investment in healthcare
So (natch) we have a new Labour government. The size of the majority should allow the new government to push through a number of their key priorities quickly and, with my property investment lawyer hat on, there are a few things which we should look out for in the healthcare space:
- Planning reform is the big one. This is going to be key to unlocking development, with recent research by CBRE making clear that whilst demand for new facilities (particularly elderly and specialist care) still high, investor appetite for the same still high but development pipeline lagging well behind. If Labour can make meaningful inroads here, that pipeline should unlock. What that looks like though is hard to predict at this point, it surely cannot just be a commitment to hire more planning officers;
- Stability from the Treasury and predictable policy in line with manifesto commitments has been Rachel Reeves' watchword, and if the financial markets respond to that we should see further falls in interest rates, which won't just unlock development but will also give funders a bit more confidence to enter the market;
- Operators will feel cost pressure from Labour's planned employment reforms, and it is not clear at the moment how fee rates may be used to balance those pressures - for the investors looking at partnership with operators, you would expect the ability to demonstrate a robust balance sheet to absorb these costs will be critical;
- Partnerships - whilst the left of the party has been vocally against private finance initiatives, the more pro-business wing will surely explore with the private sector how to unlock investment into healthcare. The private sector is crying out for the opportunity to work with the government on this and with the commitments made on tax and borrowing in the manifesto, it seems like they'll get it.
Final comment, I make no apologies for the pun in the title and if I'm the first to have used it you've seen, the newspaper editors aren't doing their job properly.
No doubt much more to come….
Sir Keir Starmer has promised to "return to politics as public service" in his first appearance since the exit poll predicted a Labour landslide in the general election.
