Following today’s General Election result, some of our clients have given their initial thoughts on how a Hung Parliament will affect the property market:
Adam Challis, Head of Residential Research at JLL (pictured), comments: “The General Election has given the country pause to consider the type of government it needs in the Brexit negotiations. The right leadership is of course, crucial for the UK from a political standpoint, but will also directly impact the economic trajectory this country takes for many years to come.
“Under Theresa May, the UK has some political continuity, but a coalition Government provides the economy with less stability. The short-term impacts are uncertain and this could drag on housing market activity if clear political leadership does not emerge quickly.
“It is likely that we will see some ministerial shake-ups in the coming days and weeks. For the most part, big changes would be unfortunate with respect to senior housing market posts, notably the loss of Housing Minister Gavin Barwell. It will be crucial that the new champions of housing market policy in Government can reaffirm commitments to the current policy direction rather than to create further disruption or uncertainty.
“Importantly for housing supply, the policy direction as set out in the White Paper on building more homes across the range of tenures, will be upheld. Supporting new methods of delivery such as Build to Rent and off-site construction are also emerging and exciting sectors that will expand the pace of housing delivery.
“JLL believes the housing crisis deserves greater ambition and bold action from the new Government. This requires cross-party support to de-politicise solutions and to provide longer-term backing for new solutions. We call on government not to lose sight of the key domestic policy challenges. It is vital that the UK government can forge a deeper commitment to housing supply solutions, recognising the common purpose of a wide range of stakeholders in the private sector.”
Jo Eccles, Managing Director of buying and relocation agency, Sourcing Property, comments: “The election result is going to create further uncertainty which is likely to keep London housing activity at its current lower levels, certainly for the short term. We especially expect it to deter overseas buyers from making a long term commitment to London property, which will particularly impact the Prime market.
“UK owner/occupier buyers will still carry on with their lives, though. We saw this in the run up to the election – none expressed concerns about the looming election campaign and it didn’t put off their decisions to buy property in order to upsize, relocate, and so on. However, the uncertainty may delay non-necessity purchases such as buy-to-let investments.
“We are still experiencing companies moving very senior executives to London (less so with junior employees), but we expect the rental market to continue to be favoured vs buying for anyone relocating to the UK for a 3 – 5 year period, particularly at the high end of the rental market where stamp duty is putting people off making shorter term purchases. At the lower end of the rental market, we are likely to see mid-level professionals continue to want break clauses in their tenancy agreements to give them flexibility in these uncertain times.
“Sterling, at the time of writing, has plummeted, but I don’t think this will be enough to entice significant numbers of overseas buyers. We saw significant sterling falls after the Brexit vote but the political uncertainty outweighed the currency saving benefit, so this is likely to be the case until stability returns.”