So now we know.
After eight weeks of campaigning, seemingly endless soundbites and strident newspaper headlines, the UK is back where it was in 2010. We have a hung Parliament and today there’s some frantic activity going on behind the scenes as the parties jockey for position, each proclaiming victory for themselves.
So Who Are The Winners?
But, if truth be told, no one has won today. The only cold fact we have is that we face months of uncertainty – possibly even longer if Theresa May stands by her vow to stay on. That might seem like a bit of an oxymoron but today – far from offering the strength and stability the Tories promised – May looks to have become a lame duck Prime Minister on borrowed time.
So what does the 2017 general election mean for the Uk property market?
The Impact On The Property Market
The answer is probably not a lot. House prices have been bumping along for a year now since the Brexit vote a year ago. The good news is that they haven’t plummeted like many commentators suggested – but they haven’t exactly soared either.
Until today, predictions were that there would be nothing more than moderate rise in 2017; perhaps a percentage point or two. By 2020, the accepted wisdom seems to be that they might be as much as 5% higher than they are today. It’s unlikely a hung Parliament is going to change that.
Why? Well, in short, with more political uncertainty ahead, some sellers – particularly those with a weather eye on the price their home may fetch – are likely to stay put, at least for now. Less stock coming onto the market tends to drive prices up but as many buyers will also be unwilling to take significant financial risks right now, the two factors tend to balance each other out. The result is likely to be a modest rise in property values – but not a massive one.
Where Do We Go From Here?
I’ve gone on record before to say, if we still want our kids to aspire to owning their own homes in future, what the UK needs is a housing policy divorced from politics. Perhaps a commission to lead the way, delivering long-term objectives which avoid the boom and bust nature of the market in the past and perhaps even influence future Chancellors when it comes to setting Budgets, ensuring family incomes don’t fall so far behind property prices, a home of your own becomes a pipe dream.
In my view, nothing which happened overnight has changed my mind.
Mrs May may have promised us a bold step forward. In reality, it feels like we’ve taken two steps back