The upcoming UK General Election is unlikely to have any substantial effect on the UK property market in the short term.
That is the pervading feeling among industry bodies, which feel that the industry will remain in ‘neutral gear’ for the time being, with any potential ramifications of the election result unlikely to be felt until a potential new party is in power after June 8.
Prime Minister Theresa May’s shock move in calling the election led many to speculate on how existing housing market policies could be affected in the event that the Conservatives are ousted by another party.
Business as usual
Few believe that the lead up to the election will see any volatility, however, with the Council of Mortgage Lenders (CML) anticipating business as usual.
The CML stated: “We do not anticipate that the prime minister’s decision to call a snap election will have a large impact on the housing market.”
Meanwhile, a survey carried out by eMoov, which questioned sellers on whether the election would hamper their plans, found that the majority of respondents will proceed as usual in the run-up to June 8.
Russell Quirk, chief executive of eMoov, said that the vote may actually serve to boost the market in the medium term once the election is over.
He added: “The eradication of questions around the legitimacy of the EU vote, a second referendum and any other opposition will only serve to buoy the housing market further and should result in a large degree of stability going forward.”
The key to a surge in activity is likely to be a clear cut decision at the polls, with a victory for the current government reinforcing measures outlined in the Budget, Autumn Statement and the original party manifesto.
Jeremy Leaf, former residential chairman of the Royal Institution of Chartered Surveyors, commented: “If the result is decisive either way that will give the government a greater mandate for its existing policies and is likely to result ina surge in activity in the housing market at least for the honeymoon period afterwards.”
Market dynamics will also serve to dictate the direction of the industry, according to the CML’s senior economist, Mohammad Jamei.
He observed that there has been a noticeable shift in ownership demographics, from buy-to-let landlords towards first-time buyer and remortgage customers.
CML data shows that the number of first-time buyers has increased steadily since early 2013, with the 12 months to March 2017 seeing 342,000 first-time buyers; the highest figure for any 12-month period in the past nine years.
Mr Jamei reiterated that the snap election will do little to curb this appetite and that market conditions are expected to be maintained through June 8 and beyond.
It comes after figures compiled by Halifax for its monthly House Price Index revealed that annual house price growth was 3.8 per cent in the three months to February, compared to the same period last year.
A 0.1 per cent quarterly increase was also observed, with the average UK property now standing at £219,755.