Ask the expert
Q. What do you think the effect of the Election result will be, if any – and have you seen any signs of it already having an impact?”
A. Personally, I would say that the actual result of the Election is of relatively minor significance to the housing market. Much more important is the fact that it’s finally over!
In the run-up to the poll, buyer activity tailed off and new instructions virtually dried up. This occurred right across the board, but was particularly noticeable at the very top end of the market – both in the “moated manor house” sector and, even more markedly, in prime Central London -- where talk of a possible Mansion Tax had a lot of extremely wealthy individuals seriously considering their future plans.
Just how much of this can be laid at the door of the actual politics involved (again, with the obvious exception of the Mansion Tax) is rather more debateable, however. The simple fact is that uncertainty of any kind is bad news for the property market. As a result, activity always drops away in the run-up to Elections, and picks up again afterwards. This time was no different.
But what does this mean, looking ahead? Well, on the one hand, industry research just published suggests that we can expect something of a short-term boost to house prices, purely on the strength of the fact that the Election is now behind us. Indeed, detailed analysis of historical data indicates that prices have risen by an average of 3.2% in every post-election quarter since 1983!
On the other hand, some in the industry are hailing the Conservative victory as being particularly good news. Predictably enough, for example, one high profile London agent has suggested that house prices in the prime central area could double in the next five years. More significant in overall UK terms is the view expressed by one the country’s biggest housebuilders, which de4scribed the result as a positive move for the industry – for example, in terms of a continuation of the help-to-buy scheme, further reforms to the planning system, and the extension of the right-to-buy to housing association tenants.
Either way, however, it’s fair to say that everyone in the industry agrees that the prospects for the property market are looking rosier now that the Election is out of the way!