Former Chancellor Rishi Sunak was made Leader of the Conservative Party on Monday and will be the next Prime Minister.

Challenger Penny Mordaunt threw in the towel shortly before 2pm on Monday, having failed to reach the 100-vote threshold to carry her through to the next round. Sir Graham Brady, Chairman of the 1922 Committee, (main pic) announced his appointment – flanked by former housing minister Eddie Hughes.

Sunak will be asked by King Charles to form a government and he will become Prime Minister, the fifth in six years.

Westminster had been on tenterhooks following Boris Johnson’s withdrawal from the process on Sunday.

PRIVATE

Sunak is expected to make an address from No.10 after meeting the King on Tuesday morning.

According to the Guido Fawkes website, Rishi described this moment for the Tories as “existential” and says there’s an absolute need to unite the party, something he hopes to do with a “broad government”, signalling intent ahead of his first Ri-shuffle.

In a short speech at Conservative HQ later Sunak said: “We now need stability and unity and I will make it my utmost priority to bring our party and our country together.”

We now need stability and unity and I will make it my utmost priority to bring our party and our country together.”

A statement from Penny Mordaunt earlier read: “Our party is our membership. Whether we are elected representatives, activists, fundraisers or supporters. We all have a stake in who our leader is.

“These are unprecedented times. Despite the compressed timetable for the leadership contest it is clear that colleagues feel we need certainty today. They have taken this decision in good faith for the good of the country.

“I am proud of the campaign we ran and grateful to all those, across all sides of our party, who gave me their backing. We all owe it to the country, to each other and to Rishi to unite and work together for the good of the nation. There is much work to be done.”

REACTION

Timothy Douglas, Head of Policy and Campaigns for Propertymark, says: “With a new Prime Minister, there will likely be changes in DLUHC. The industry is weighted with frustration at the inconsistency of leadership in housing.

“Housing is a huge conversation right now and needs to be prioritised by the Prime Minister, with a cross departmental, long term strategy.”

Lawrence Bowles, Director of Research at Savills, says: “The uncertainty of the last few months has had a material impact on gilt rates: the rate at which the UK government can borrow. In turn, this impacts the cost of borrowing for the rest of us. It affects mortgage rates for home buyers, development debt costs for housebuilders, and refinancing costs for property investors.

“Anything that helps bring certainty and confidence back to the market is likely to reduce borrowing costs. That, in turn, will reduce affordability pressure for households securing mortgage finance, for housebuilders starting on new sites, and for investors buying and operating homes for rent.

AFFORDABILITY

“We can still expect to see affordability pressure grow in the coming months as mortgage costs rise. We can take some comfort, at least, that this pressure will peak at lower levels than we might have feared previously.”

The last few months have damaged the UK’s international reputation and economic standing.”

Melanie Leech, Chief Executive, British Property Federation, says: “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 their leadership team as soon as possible and provide clarity on their strategy for stabilising the economy and their policy priorities.

READY

“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.”

Gráinne Gilmore, Director of Research and Insight at Cluttons said: “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.

“More political certainty should mean that money market rates, which determine the pricing of fixed-rate mortgages, begin to recede, which could bring down the cost of fixed-rate deals. However, it is very likely that the Bank of England will increase the base rate next month, which will result in higher payments for those on variable rate home loans.

They should prioritise at providing clarity around housing policies.”

“Once the government is stabilised, they should prioritise at providing clarity around housing policies, including planning reforms, to provide a clear steer for homeowners and businesses across the industry.”

FALLING

Tom Bill, Head of UK Residential Research at Knight Frank, says: “Falling borrowing costs will support demand and transaction volumes in the UK housing market, but this should be seen in context.

“Mortgage rates may come down compared to the period following last month’s mini-Budget but a 12-year period of ultra-low borrowing costs is over. As demand subsides, 18 months of double-digit house price growth will also come to an end.”

The property market took a massive bashing under Truss and Kwarteng.”

Allan Fuller, of Putney-based Allan Fuller Estate Agents, adds: “The property market took a massive bashing under Truss and Kwarteng due to the mini-budget, most of which has already been swept aside.

“The new order now needs to get into action rapidly to restore confidence internationally as well as internally within the UK. They need to give confidence to anyone thinking of moving house.

“Next Thursday, the Bank of England decision on interest rates will be announced. A modest rise, or even remaining as it is, would be a signal that calm is returning and no more bitter medicine is needed just now.”