Here we go again: what will the general election mean for the housing market?
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Property and politics go hand in hand, but with short run up to the vote it’s business as usual for north London estate agent. However, the new government will need to give the housing sector some serious thought, says Simon Gerrard
Just when we thought the world of politics would quieten down – with the Government preparing for their departure from the EU in two years’ time – the Prime Minister decided another General Election was needed. As well as being the fourth major vote in as many years, like any election there is the potential for it to significantly change the UK’s political landscape.
Given how tied the property and political environments are, many may be asking how this General Election will affect the market?
At the last election housing was a key component in all the main parties’ policies. At the time of writing no one has so far published their new manifestos. However, given the current pressures facing the housing sector we very much hope that providing a much needed boost to the market will remain high on the party’s agendas. We need action from the Government to ensure that those who want to move or buy their own home are empowered to do so – not blocked at every turn.
If the Tories remain the party in power they will undoubtedly continue on the path set out in the recently published Housing White Paper. While I believe opportunities were missed and some of the proposals don’t go far enough, it is at least a step in the right direction.
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The start of the year has been remarkably busy for us in North London, with more property coming to market and more sales being agreed. Traditionally the housing market quietens down in the weeks leading up to a vote – as things are uncertain many prefer to sit tight and wait until the lie of the land is known. However I think we can all agree the last few years have been anything but traditional.
If, as many expect, the Tories win a strong majority, then it is likely that we will see upward pressure on prices. Therefore those looking to buy should not sit on their laurels. Prices are unlikely to go down and so you will likely be waiting for a reduction that never comes, and could indeed go the opposite way. Get a move on and don’t let the process slow down.
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This General Election is also unique in the fact that the lead time before the vote is much shorter than usual, and the outcome is not as finely balanced as we’ve seen in many past elections. For this reason it is even more likely that the property market will remain upbeat and busy.
When we look back at the end of 2017, May and June could well be seen as a blip in the continuous momentum of the year as a whole – a momentum which has seen upward pressure on house prices as the market reacts to the fundamental issue of a lack of stock.
In exploring the political impact on the property market, the one area of particular concern is the lettings market, and in particular the Private Rented Sector. It is an easy target for political parties of all colours, who make policy announcements intended to win over voters without fully understanding how the market really works. Lettings has effectively become a ‘hot potato’ in recent years.
The last two Chancellors have each had a go at undermining the Buy-to-Let market by introducing punitive changes to the landlord’s tax regime, and proposing the banning of all fees to tenants. Instead of serving to help renters and tenants, as was declared, both policies have simply deterred investors from entering the Buy-to-Let market – which ultimately results in a reduction in the number of properties and a hike in rental prices.
However, while the goal posts have moved, I am confident that in the long run Buy-to-Let will continue to prove to be a good investment for many people. The market will continue to be a strong part of the British economy, but in despite of the government and their attempts to ‘improve’ it.
So in the face of this snap General Election the overall theme is one of business as usual – with the hope that, whatever shape this freshly elected Government takes, supporting our housing market in an informed and considered way is a top priority.
Simon Gerrard is managing director of Martyn Gerrard.