Jeffries has upgraded its prediction for the UK residential property market, suggesting that fears that its fortunes could suffer due to this month’s general election have been overplayed. Simon Morris has explained what this may mean for investors looking to enter UK residential property.
The UK housing market has been hit with a case of pre-election jitters throughout the first four months of 2015. Polls have consistently shown that this is the most tightly fought election in a generation and that no party is likely to gain a majority in Parliament.
This has sparked confusion over which policies will govern activity in the residential property sector in the wake of 7th May. The two main parties have very different visions for the sector and this uncertainty had caused many to expect that the housing market would enter a period of decline in the run up to the national poll.
Jeffries upgrades UK residential property sector
However these fears haven’t prevented growth. The UK broking arm of US investment bank Jeffries has upgraded the whole UK residential property market. This follows the investment banks’ decision to wipe out all buy recommendations for the sector in January of this year and its suggestion that house prices could fall in the vital London and South East markets.
Anthony Codling, a property analyst at Jeffries explained the decision. He was quoted by Yahoo Finance saying that “the latest data points to a stronger pre-election housing market than we had anticipated. With less than a month before the UK votes, the anticipated slowdown and profit-taking have yet to be seen.”
House prices rise in the UK
Essentially, a number of early indicators have refuted the idea that the housing market will suffer as a result of the elections.
These indicators include new figures from Nationwide which show that house prices rose 1% in April 2015; the biggest increase the sector has registered since June 2014. The Telegraph has noted that the average price for a house in the UK now sits at £193,048.
The future of the UK housing market
This indicates that the UK residential market is stronger than anybody thought it was. Experts across the sector believed that an uncertain election would limit growth but these predictions appear to have been overplayed in light of Jeffries’ decision to upgrade the whole UK residential property market.
This suggests that the UK housing market could remain robust going forward. In other words, it may prove a lucrative investment option. However Simon Morris, a property specialist whose property investment advice has been featured on online publications such as Reuters, would warn investors to tread with caution and do their research before they seek to capitalise on a buoyant UK housing sector.