Property industry implications of the Gorton by-election

Mostly by-elections can be pretty meaningless in the long-term; feverish media speculation in hyperdrive, the sitting government gets a protest vote kicking, depressed government-supporting voters stay at home, a minor party secures a ‘surprise’ win claiming it as a pivotal moment in human history (it never is!), and a low turnout deceives everyone into thinking this one might change things. And then, at the next election, normal order is quietly restored which no one notices having totally forgotten about the previous by-election upset some time before. 

The REC team are thus going out on a limb here: this time, this one, at this moment looks different. And potentially has significant implications for us in the property industry. Here are our ten takeaways that you won’t read in the established media:

1. Journalists have ceased to be independent analysts worth listening to – The standard media drumbeat in the run up to the by-election and in the early days was that Reform was going to breakthrough. They became obsessed with Matt Goodwin, the Reform candidate. But here’s the thing: at the 2024 General Election, Labour won more than 50% of the vote in Gorton. The election before, even more than that. The REC team were totally perplexed by the childish pack-like media narrative. How would a very solidly Left voting seat, with a large immigrant population, suddenly switch to voting quite hard Right. It just wasn’t plausible. The problem is that for the most part journalists have switched from ‘independent analysts’ to ‘party political activists with a press pass’. So lesson number one, dear reader, is please stop listening to the media; they do not know what they are talking about. 

2. Another epic polling industry fail – Our increasingly inaccurate polling industry, that these days seems to lurch from one polling fail to another, got it wrong again. All the pollsters had been increasingly saying during the campaign ‘it’s too close to call’. Eve of poll predictions had the Greens, Labour and Reform bunched around 27-28% each. In reality, the Greens thumped out a very clear win with 40% of the vote. Granted that (a) individual by-elections are trickier to forecast, (b) the Greens and Reform are newer kids on the block so it’s harder to use past electoral performances as future predicters, and (c) constituencies with large ethnic minority populations are harder to politically profile. But if as a pollster your collective brain power, expert modelling and deep analysis cannot spot a party going to win with 40% of the vote and a wide winning margin, frankly you’re in the wrong business. Your granny’s tealeaves might be just as accurate! So lesson number two, dear reader, is stop putting much faith in the pollsters; their current online polling business model doesn’t work very well in the current political climate.

3. First past the post isn’t working – As a voting system, FPTP is designed for elections dominated by two political parties. In a now eight party system, it simply doesn’t work. We saw that at the 2024 General Election, when the Lib Dems, with the same share of the vote as 2019, went from 12 to 72 MPs and Reform, despite winning 600,000 more votes, only won 5 Westminster seats. So lesson number three is that voting reform is likely again to become a very live issue in UK political debate. There will inevitably be a push for some version of proportional representation which, if it comes about, could change the face of UK elections for all time.

4. UK politics is going through a major realignment – When around 70% of the votes cast are going to the Greens and Reform, and only around 29% of votes are going to Labour, the Tories and Lib Dems, something major is afoot. And we are seeing this all over the western world. With a consistent track record of overpromising and underdelivering, voters have had enough of Establishment parties. They are taking the view: ‘you clowns have failed, so let’s try some other muppets as they can’t be any worse’. Lesson number four is be careful what you vote for; different may well actually mean worse.

5. Politico-religious sectarianism is now baked into UK politics – Decades of multiculturalism and the more recent historic rise in immigration has meant that we have imported international politics into even Parliamentary by-elections and local council elections. In a constituency where 30% are Muslim voters, the Greens ran a nakedly pro- Gaza and anti-Israel campaign. As if Middle East politics has any relevance to the gritty issues facing day to day life on the streets of south east Manchester or the newly elected backbench MP for Gorton in a political party with only five MPs has any influence or standing on international affairs. Really, it’s ridiculous. So lesson number five is that the ethnic minority make-up of local electorates now greatly influences which politicians win elections. Think that through: there are around 40 Parliamentary constituencies with large Muslim populations. We have numerous constituencies with large Hindu populations. British politics is going to get trickier.

6. In the medium term, Reform may benefit from this result – Sounds counterintuitive, no? Not least because, whilst still far ahead in national polls, Reform’s lead peaked some months ago and has been very gently slipping over the last few months. But this result and the Greens’ deeply unattractive sectarian campaign could act as an ugly recruiting sergeant for Reform at forthcoming elections. Red wall traditional Labour voters and Tory ones giving up on the Conservatives, may well say to themselves: ‘Farage has a point. Immigration is out of control. Only Reform can change that.’ Unappealing though this may be, it is perfectly logical for those voters. Lesson number six is this result may not mean Reform has peaked after all; they could rise still further.

7. Tactical voting is a huge factor now – For many years in French presidential elections we are used to a populist nationalist member of the Le Pen family doing well in the first round then every other party ganging up on them in the second round in order to defeat them. This is the problem for Reform. All manner of unlikely alliances between Labour, Lib Dems, Greens, SNP and Plaid Cymru Left of centre voters will increasingly band together to thwart Reform candidates. There are so many tactical voting campaigns on social media these days, the REC team has rather lost count of them. So whilst national polls make happy reading for the Farargistes, can these actually be translated into seats won? Lesson number seven is that just because our wonky polls say Reform will win doesn’t mean at all that they will.

8. Labour is screwed – In by-elections, it is often quite normal for government-supporting voters to stay at home but return to the fold for the following General Election. This time turnout was almost the same as in 2024. For sure, some Labour voters will have stayed at home, while Reform and the Greens picked up some new voters. But the lion’s share of Labour’s 9000 lost votes did not stay away: they switched to other parties. And Gorton was Labour’s sixth safest seat. Let that sink in. Sixth safest. Begs the question, right now is there such a thing as a safe Labour seat? In many recent polls (should you believe them anymore!), if anything close to their predictions come true at the next General Election, the entire Labour cabinet would lose their seats! This is mass wipeout territory. And for a party that won a landslide around 18 months ago. Bear in mind that in the 200 or so council by-elections since May last year, not one has been won by Labour. Which gives us lesson number eight: all those Labour MPs and councils our clients are used to dealing with, think again. Get busy understanding the background local politics of every property asset you own. Things may change big time!

9. Conservatives are screwed too – At the 2024 General Election, Reform stole around 20% of the Tories’ votes which just snuffed out any meagre chances the Tories had. In the Gorton by-election, they buried the Tories (and stole a chunk of the traditional red wall Labour vote to boot). Reform is essentially killing the Tory party one election at a time; the more the Tories look weak, the more Reform grows strong. It is not an exaggeration to suggest that we might be re-experiencing the equivalent of the Liberals being usurped by Labour in the early 20^th century. As much as Kemi Badenoch is receiving better reviews in the media each week at PMQs, her party is at best flatlining along the bottom. So Lesson number nine is: see lesson number eight above, delete Labour and insert Conservative. Again, all our clients need to review the politics of their property assets in Tory councils and constituencies; they may very soon be under new management.

10. The Lib Dems are no longer the ‘go to’ Left protest vote – And that could be existential for them. The Lib Dems have historically used by-elections as their recruiting growth engine, knowing full well that they will be squeezed back down to normality at the next General Election. But that entire strategy relied upon them being the default Left protest vote. And that ship is sailing fast right now. If the Greens keep doing well, the Lefty protest voter most likely will just move on. We are already now regularly seeing media commentary asking ‘what is the point of the Lib Dems’? Their differentiation from Labour has for some time been all but invisible. Who needs Ed Davey anymore? And thus we come to lesson number ten: long term, unless the Lib Dems can come up with a new USP soon, they are staring down the possibility of the Greens stealing their Left and Labour peeling off their Right. Extinction zone.

So, in stark terms what does all this mean for the UK property industry?

• Keir Starmer is obviously a dead man walking. With such a ragbag selection of C teamers lining up for the job, when the coup comes – the money being on 8 May onwards – the replacement may well be worse not better. Between now and then, Starmer will likely tack to the Left in the hope of delaying a challenge. And that trend may accelerate once the Labour Party is under new management

• Pro-development politicians, the Tories of old or New Labour more recently, are a thing of the past. How do we do development when most councils are anti-development and then national government is too?

  
  

• Increasing political chaos beckons, election by election, including at local council level. Be smart. Understand this and plan ahead. Different political scenarios need to be gamed for every property asset

  
  

• The next General Election – right now most likely in summer 2029 – looks especially messy. We could be in hung parliament territory, a weak coalition government possible, a quick second General Election not out of the question. From that vantage point, 2025-2028 may look like it was a golden era for achieving local plan allocations and planning consents. The REC team’s view is ‘make hay while the sun shines’; tomorrow may have very inclement weather