Michael Stone, founder and CEO of new homes specialist Stone Real Estate, looks at what each political outcome of the upcoming election could mean for the UK property market.
1. A Conservative majority
A Conservative majority would bring political certainty, at last, something the market has been crying out for pretty much since the referendum itself.
We’ve seen home sellers, developers and home buyers sit tight for quite some time now and while many have continued to transact, this overarching ‘wait and see approach’ has created a huge coiled spring of anticipation.
A Conservative majority would see these shackles removed and we can expect a market bounce from the get-go in 2020, not only where housing supply is concerned, but with a notable increase in buyer demand levels as well. Opening the flood gates of buyer demand will spur an almost instant uplift in the rate of house price growth, returning to ‘normal territory’ of around a 5% increase per annum.
Given the recent performance of the government in new house building terms, with some 241,000 delivered so far in 2019, we can expect that supply will also remain buoyant should also have a positive impact on social housing given that it is linked by way of S106 agreements.
2. Labour Majority or Corbyn as PM
Ok, don’t panic. This isn’t the worst-case scenario for the UK market although it may be for model-England, UK business and the wealthy.
We’ve seen the UK property market weather some rather severe storms before and this is largely due to our aspirations as a nation to own our own home. Despite Jeremy Corbyn’s mantra that “all property is theft”, supply will continue to outstrip demand and prices will continue to increase, albeit the market freeze we are currently seeing might take longer to shake off.
Will Corbyn enact his house building revolution on social housing? I think not given the practicalities of doing so, but should he get into power, only time will tell.
The upshot, keep calm and carry on and don’t run for the exits just yet.
3. Hung parliament – No PM
A hung parliament is possibly the worst outcome where the UK property market is concerned and would plunge us back into a political Groundhog Day of uncertainty and Brexit delays. In doing so, buyers, sellers and housebuilders would no doubt remain sat on the fence and the sluggish rate of house price growth seen over the last year, in particular, would persist.
However, more recently the market and in particular buyers of new homes have shown a thick-skinned resilience to negative political market shenanigans, with activity levels remaining high. This will no doubt continue regardless of the outcome as people refuse to keep their finger on the pause button and want to continue to move on with their property purchases and life in general.
All we can do is buckle up and await the inevitable horse-trading and squabbling for the next few weeks whilst ‘personal terms’ are negotiated.
Fingers crossed that we don’t end up like Belgium who had no Government for over a year. Although, perhaps that would be a result given our current situation?