The election win of the Conservative party has been welcomed by many who believe a continuation of the policies from the past five years will bring much needed stability and security.
The markets have cheered the Tory win with a jump in the Sterling and there is a general feeling of relief, especially in business circles.
Positive comments have come from the property market as well, but as it has become clear that the next government will be a Conservative one, industry experts point out the weaknesses in the party’s housing pledges as well.
Mark Hayward, managing director, National Association of Estate Agents (NAEA) comments:
“A majority government is good news for the housing market. With the Conservatives having secured a slender majority, we’re looking forward to seeing policies they’ve pledged such as their first time buyer (FTB) new-build commitment and their Help to Buy promises come through.
“During their election campaign, the Tories outlined a seven point plan, pledging amongst other policies, to tackle the growing supply and demand issue in the country for FTBs. The Help to Buy ISA, brought about during the Budget will now be pushed forward, meaning that for every £200 saved for a first house, the Government will top up with £50 more. Effectively a tax cut for FTBs, this, along with their pledge to build 200,000 quality starter homes with a 20% market rate discount for buyers under the age of 40, will help the housing market to level out and help FTBs get on the first rung of the ladder. Right to Buy for housing association tenants will also now be extended, giving an extra 1.3 million families the right to buy their home. Again, this will help supply and demand to level out.
“Our concerns with a majority Conservative government is whether they are going to be able to cash the cheque of promises they’ve made for home ownership within just five years. Supply and demand is a huge issue plaguing our country, and without tackling issues over planning, infrastructure and skills capacity, we worry that they will be unable to meet the growing demand of FTBs and fulfil their promises.”
Conservatives have to deliver on election promises and do more for housing construction
While many of the housing proposals in the Conservative manifesto would benefit certain pockets of the market, the new cabinet will need to crack on with more effective housebuilding policies, Russell Quirk, chief executive of estate agency eMoov, says.
“Research by eMoov.co.uk has found that under their tenure, a Conservative government is twice as successful in seeing an increase in house prices, certainly a plus where homeowners are concerned.
However a recent poll of MPs and the general public found that many believe that Britain is currently experiencing a housing crisis. There is a rather strong argument that the current government’s policies on the property construction, or lack of it, has contributed to this current crisis.
If they are to really help the housing market they need to deliver on the regenerating of brownfield land to facilitate the construction of the 400,000 new homes. Under the last government there was a woefully inadequate shortfall of around 70-80,000 homes a year and this can’t continue,” he comments.
Conservative policies would benefit both the top- and the bottom-end of the market, but the former would benefit more than the latter, Quirk finds.
“Those at the top end of the UK property market will be breathing a sigh of relief having avoided a hefty, Labour lead, Mansion Tax.
I don’t think there will be huge implications at the other end of the market. The Conservatives introduced the new Help to Buy ISA to encourage first time buyer votes and plan to extend it. I can’t see them making a U turn on their Stamp Duty Tax amendments either so the lower end of the market should benefit to some extent,” he says.
A clear election result was the best thing for the property market
Buyers and sellers on the housing market have been in a limbo for the past few months waiting for the outcome of the General Election and a clear result is the best thing what could happen, comments Sue Crossley of The Country House Company, a personal and professional advisor on the sale, purchase, letting and management of country homes.
“The worst result would have been a hung Parliament, a minority government or a coalition of many parties that created further uncertainty in people’s minds, so for one party to get a working majority and provide certainty and reassurance for buyers and investors is helpful.
“A number of house sales have been held up because buyers were unsure what the future held after the election as all the parties had different proposals that would impact on the property market.
“Now I fully expect those sales to go ahead and for there to be a significant step change in transaction levels both for sales and lettings throughout our area because of the increased confidence the General Election will provide,” Crossley says.
London Prime to get a boost after election
Trading in prime London properties is expected to accelerate after the election as developers welcome the result of the vote and the uncertainty is over, according to property broker Black Brick.
Camilla Dell, managing partner of Black Brick, comments:
“A lot of people have been holding off from making decisions but, overnight, an enormous amount of uncertainty has been removed from the market. We’ve already had deals exchange this morning and we’re now moving forward with a potential £22 million transaction. We expect this trend to continue as buyers look to move quickly to avoid potential price rises now confidence has returned and we expect conditions to return to a much more fluid, normal market, particularly in the £2m plus bracket where both buyers and sellers will return.
“This morning a lot of Prime London property developers will be breathing a sigh of relief, luxury developers had a great deal at stake.”
However, Caspar Harvard-Walls, partner at Black Brick, warns against too much excitement over the outcome of the election.
“This is certainly the best possible result for the market, but we should sound a note of caution,” he says and adds:
“A lot of our clients are dollar-based, so any rally in the pound will impact London’s value. In addition, the Conservatives have promised a referendum on Britain’s EU membership, while we would expect the UK will vote to stay in, the run-up to the referendum would, again, introduce a dose of uncertainty to London’s property market.”
