Estate agents have suggested that the UK housing market is cooling down in the run up to 7th May 2015. Simon Morris asks; what does the general election mean for the UK property market?
Uncertainty in the UK property market
Property likes certainty. The sector thrives when investors can be certain of what to expect. However when uncertain conditions dominate the market, the sector can take a turn for the worst.
Take the Scottish referendum as an example. House prices north of the border dipped 0.2% in August 2014, the month before the vote. Experts suggest that the dive was prompted by uncertainly over the impact a yes vote would have on Scottish housing policy.
We are just over a month away from the general election. On 7th May, the UK will vote on who will run this country. This has been billed as the most uncertain election in a generation. Following in the wake of the coalition deal of 2010, it looks as though 2015 will once again see a minority government take control of Westminster. At this point there’s no clear indication in the polls who will head the next coalition; the Conservatives or Labour.
UK property market cooling down
Experts have recently noted that the housing market is already slowing down in the run up to the vote. A new poll has from the National Association of Estate Agents (NAEA) has shown that 46% of its members have seen the residential sector decline in the weeks before the national poll. A further 27% said that the general election will be the biggest event to hit the UK housing market in 2015.
However February was a positive month for first time buyers. The survey found that 30% of housing sales last month were conducted by first time buyers; the largest number since September 2014. Figures also show that housing demand has risen, whilst supply has declined. In February there were 366 house hunters registered per NAEA member branch, whilst in January there were only 353. In contrast there were only 43 houses per branch this month, whilst there were 44 the month before.
“Vital that building more homes is top of their agenda.”
The study also revealed what agents think of the housing market policy proposals of the two main parties. 45% of those polled believe that the Tories’ promise to build another 200,000 homes is the best thing for the housing market. In contrast more than half (57%) believe that the Labour party’s notorious ‘mansion tax’ on properties worth more than £2 million would have the biggest negative impact on the market.
NAEA managing director Mark Hayward explained what agents are looking for from the next government. Hayward was quoted by Property Wire as saying: “Demand is still vastly outweighing supply in this country, so it is clear something needs to be done to aid this growing problem. It will be interesting to see the outcome of this year’s General Election, but whoever wins it is vital that building more affordable homes is top of their agenda.”
Seek expert advice
In property specialist Simon Morris’ opinion, we can’t know what effect the general election will have on the UK property market. It depends who wins.
However it’s clear that investors need to be extra careful before they put their capital into an uncertain market. As the expert suggested when offering expert advice for investing in property in 2015, every investor needs to seek as much advice as they can if they want to reap strong returns from the UK property market.