The Prime Minister's surprise decision to go to the polls in June has introduced yet another variable to the UK housing market. But property experts are optimistic.
What’s the latest?
Prime Minister, Theresa May has surprised the country with her decision to go to the polls on Thursday 8 June. But what impact will the snap General Election have on the UK's housing market?
Early property commentators have claimed that, while the move would create additional uncertainty in the short-term, it's unlikely to have a significant negative impact – and could even give the longer-term property market a boost.
A survey by online estate agent, eMoov.co.uk also revealed that the majority of buyers and sellers would NOT change their plans due to the General Election.
Why is it happening?
The Prime Minister’s decision to call a General Election was driven by a need to summon a strong parliamentary mandate for Brexit negotiations as opposition parties and the House of Lords had indicated they may oppose the Government.
The election contributes to the existing uncertainty surrounding the UK’s withdrawal from the EU. But if the Government gains a bigger majority, it should to lead to greater economic and policy stability going forward.
At the same time, the Prime Minister is likely to have to set out a clear vision for Brexit as part of her election campaign, which could help to reduce some of the current uncertainty surrounding Britain’s future outside of the EU.
Who does it affect?
According to the eMoov survey, 57% of sellers said they would go ahead with their decision despite the election, with only 18% saying they would now wait.
Potential buyers were equally committed, with 59% still wanting to make a purchase, and just 18% saying they would put their plans on hold.
But, despite the determination of both buyers and sellers to go ahead, markets hate uncertainty and the General Election is likely to cause a dip in transaction volumes in the run up to the vote. However, it may lead to a pick up in activity once the result is known.
The property market is already suffering from a record low number of homes for sale, and this factor is unlikely to improve in the short-term.
Sounds interesting. What’s the background?
The General Election comes at a time when the housing market was already showing signs of slowing down.
But property market commentators remained upbeat that activity should bounce back once it's known which way the nation has voted.
Jeremy Leaf, former residential chairman of the Royal Institution of Chartered Surveyors (RICS) said: “...if the result is decisive either way, that will give the Government a greater mandate for its existing policies and is likely to result in a surge in activity in the housing market at least for the honeymoon period afterwards.”
Russell Quirk, chief executive of eMoov agreed: “The eradication of questions around the legitimacy of the EU vote, a second referendum and any other opposition will only serve to buoy the housing market further and should result in a large degree of stability going forwards.”
Top 3 takeaways
- The UK’s snap General Election is not expected to significantly hurt the housing market, say commentators
- But it will create additional uncertainty in the short-term
- The majority of buyers and sellers say they will not change their moving plans due to the election