What’s in store for the post-election housing market?

by Housesimple on 22nd June 2017

Both 'uncertainty' and 'stability' are buzzwords that seem to be having a bit of a heyday at the moment. Particularly since the recent general election saw Theresa May lose the Conservative majority she'd been hoping for in the run up to the Brexit negotiations. With all these feelings of doubt and apprehension bouncing around, will there be any negative effects on the UK housing market?

Strong and stable prices 

Before the general election we predicted two things. Firstly, that some of that dreaded uncertainty might cause a wobble in prices. Secondly, that the current housing shortage and the cross-party plans to increase property building could mean we’re unlikely to see prices rise or fall significantly in the long-term. Both of those calls, we’re pleased to say, still look about right. 

The combination of the pre-election 'wait-and-see' mentality among homeowners and the post-election hung parliament did cause a minor slowdown in house prices, according to Halifax stats. However, despite predictions of doom and gloom from some commentators, results from home builders Crest Nicholson and Bellway, and stats from Your Move show that both prices and demand remain high.

Long-term trends 

The main reason for these stable home values is that there are still not enough houses to meet demand. Political turmoil, as well as putting people off buying a home, also makes builders nervous about investing in new projects and so delays any increase in new properties. And, if the new government proves shaky or puts the brakes on plans to boost house building, we could see further delays with new housing stock. That’s likely to cause prices to rise even further.

The good news for first-time buyers is that the weak pound has proved a boon for international investors. That means there’s still money coming in, and builders won’t be as nervous as they otherwise might have been. Meanwhile other measures like the changes in Stamp Duty Tax for landlords have cut demand from the buy-to-rent market, reducing that upward pressure on prices.

So as the hung parliament takes shape, we can expect to see more activity from both builders and buyers. That should put us back on track for the steady price growth forecast for 2017, without delivering any nasty surprises.

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