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On Friday morning the Conservatives stole the election by a landslide for their fourth consecutive term. But as Boris Johnson settles back into 10 Downing street, our minds are on how the General Election result will affect house prices?
Whether you already own a home or are looking to get on the property ladder, for us property-obsessed Brits, house prices are never far from our minds. As you can imagine we are all hankering to know what we can expect over the next four years. While it looks like good news for the property market, things aren’t looking as bright for house prices.
How the General Election result will affect house prices
Estate agents are optimistic that despite a continued decline of activity on the housing market in November we should see a rebound following the General Election. The Royal Institution of Chartered Surveyors revealed that demand from potential buyers, instructions to sell and agreed sales all continued to worsen in the lead up to the Election.
Property professionals have predicted that sales expectations over the next 12 months will reach their highest level since the beginning of 2017. A significant reason for this is that with the Conservatives returning to power and expecting to deliver Brexit on 31 January. This brings an element of stability which is good news for the housing market.
‘The most important thing for the housing market is that the result brings some stability, albeit short-term at least until we see a clearer timetable for Brexit,’ Jeremy Leaf, former residential chairman of the Royal Institution of Chartered Surveyors told Zoopla. ‘This should generate a return of confidence to the market, which is what we have been looking for.’
This means that people who may have been putting off selling there homes due to political uncertainty may start to act with a slightly clearer idea of what the future will hold. However, while an increase in supply of housing is expected, experts warn that we might not see a similar bounce in house prices.
‘Supply is likely to rise as political uncertainty recedes and private and public spending stimulate the UK economy,’ Liam Bailey, global head of research at Knight Frank told This is Money. ‘This will put downward pressure on prices, however some vendors may expect a bounce in prices, which may create a stand-off between buyers and sellers as the market re-prices.’
However, while the election may have brought some certainty, we can still only speculate on what Brexit will do to the property market.
In the lead up to the election we asked some experts on what they thought would happen to the UK property market after Election Day. Here were are predictions:
Our pre-election prediction
Michael Stone, founder and CEO of new homes specialist Stone Real Estates claims that we could see an immediate increase in house prices if the Conservatives were to get a majority.
‘We can expect a market bounce from the get-go in 2020, not only where housing supply is concerned, but with a notable increase in buyer demand levels as well,’ Michael Stone explains.
If the election sees Jeremy Corbyn become Prime Minister, Michael Stone believes we could see a continuation of the current property-market freeze. However, he also says that we can expect to see an increase in house prices, though not as dramatic.
‘Supply will continue to outstrip demand and prices will continue to increase, albeit the market freeze we are currently seeing might take longer to shake off,’ Michael Stone says.
However, a Labour win could mean good news for first-time buyers if they follow through with their ‘Right to Buy’ for the private rented sector. ‘It appears to be great news for hopeful first-time buyers who have a good-sized deposit,’ reports estate agent Portico on their website.
The scheme would allow private tenants to buy the homes that they live in from their landlords at a discounted price.
This could be the worst possible outcome for the UK property market according to Michael Stone.
‘A hung parliament is possibly the worst outcome where the UK property market is concerned and would plunge us back into a political Groundhog Day of uncertainty and Brexit delays,’ says Michael.
The result won’t change a thing
However, some experts aren’t convinced that the General Election will have any significant impact on the UK property market.
‘We believe long-term house prices will hold up regardless of who wins the election, whilst the structural shortage of affordable properties remains,’ says Sam Mitchell, CEO of online estate agent Housesimple.
‘Given the revolving door of housing ministers and a lack of strategic vision on housing, we remain cynical about any of the parties abilities to really fix the housing crisis,’ he adds.
All we can is speculate while we wait to see how the General Election result will affect house prices.