General Election 2017: how is a hung parliament going to affect the housing market?
Predictions from the property experts
Buyers and sellers should “keep calm and carry on” despite the shock General Election result. That’s the message from estate agents who say it is business as usual.
The UK has been left with a hung parliament after the Conservative Party lost its majority in the June 8 General election. No single party managed to win the 326 seats needed for an overall majority in the House of Commons. The Conservatives are still the biggest party and have the first chance to put together a coalition Government. Prime Minster Theresa May is holding talks with Northern Ireland’s Democratic Ulster Unionist Party.
If these break down, the Tories could attempt to rule with a minority government or the Labour Party try to form a coalition. Bobby Hall, partner at The Buying Solution estate agents, said: “The property market does not like uncertainty and these are most uncertain times that we are living in.
“We don’t know what is going to happen over the next 24, 48 or 72 hours. We don’t know which parties will be in Government or if Theresa May will stay on as Prime Minister. The whole political scene is in flux and that affects the property market.
“How the Government is run, how it sits in Europe and the world stage – these are the most uncertain times.
“But the average person – whose house is their home rather than a property investment - needs to keep calm and carry on. Some people are still going to have to move because of a new job, or to send their child to a new school while others may need to sell a house after an elderly relative dies.”
Steve Moir, director of Plymouth-based estate agents Hennings Moir, agreed, saying: “The reality is people have got to get on with their lives.
“If an individual’s job is not particularly at risk, I don’t think people will see a reason to change their plans. We are still getting offers coming in and sold a few properties at the weekend.”
Hugh Wade-Jones, Group MD of the Enness group, a mortgage broker for high net-worth properties, suggested a more cautious approach.
Writing in his company newsletter, he said: “Those currently in the process of buying or selling a home may wish to pause for several weeks until the country’s future is more certain; at this moment in time it is impossible to tell which party will be taking the country forward.”
The housing market has already seen a drop in house prices in some areas and a fall in new listings in the run-up to the general election. It is too early to say what effect a hung parliament will have on prices, say experts. But the pre-election lull is likely to continue until a new Government is formed and there is more political certainty.
The housing market was cooling even before the dramatic poll result that led to a hung parliament. Reasons included the impact of additional stamp duty taxes which led to people opting to stay put and improve rather than move. Lenders are having to compete for new customers by slashing their rates. If buyers are prepared to lock in for two, three, five or even 10 years, this is a great chance to grab these low rates while they are still available.
There could be more help for first time buyers. The increase in Labour support has is largely due to more young people voting. This means politicians of all parties will have to appeal more to young voters than they have done in the past. Mr Moir said: “If the Government extended the Right to Buy scheme so that it covers older properties as well as new-build and restricted it to only first-time buyers, that would be a positive move.”
George Clarendon, partner at Knight Frank in Winchester said political stability was needed to boost the property market. But he said it was still business as usual. “Buyers just need to fall in love with a house, hopefully negotiate a good price and life goes on. This is a great time to sell your house. There are nicely striped lawns and the flowers are out.
“There are going to be people who say ‘what if, what if’ and they are going to miss out on the market this summer but others will just get on with it.”