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p>Everyone’s talking about what will happen, but are we ignoring the changes right now?
In the run up to the greatly anticipated General Election (for what has felt like an eternity), many property professionals have been debated what will happen to the industry come 7th May, however we should pause to think what has happened in the run up to the big day.
Dubbed as the ‘uncertainty period’ by some, for obvious reasons, the stretch before the Election saw house purchase lending fall in February according to CML figures which were revealed last week, noted to have possibly been “exacerbated” by uncertainty ahead of the General Election.
Earlier this month, property development firm Persimmon also stated that it has become “increasingly difficult” to secure planning consent for development sites as May’s Election approaches.
“While we would expect such delays to be short term in nature, they are hindering the expansion in the number of active outlets required by the house building industry to support an increase in the volume of newly built homes delivered to the market,” its Chairman announced in a statement.
Steve Barber of Bridging Finance Solutions added that uncertainly surrounding what the future holds will have a direct impact on new build consents.
“This has happened in the past traditionally and problems and delays are expected to become compounded as we get closer to election.”
“The property market is built on confidence and knowledge and understanding of any future changes. When we look at the Scottish referendum, we saw house prices north of the border per cent in August 2014, the month before the vote, people are cautious prior to any political change but again this is generally a short term reaction.”
James Bloom of Regentsmead agreed that there is always uncertainty pre-election, which leads to a temporary slowdown.
“This election has been no different,” he said, adding that the market dislikes uncertainty and this election is “more uncertain than any in modern history”.
“Traditional lending sources continue to be cumbersome and indecisive which makes for a strong time for self-funded niche lenders,” he added.
Matthew Arena of Brilliant Group suggested that political issues may well be affecting larger investments, including the top heavy London market dominated by overseas investors.
“The market has certainly calmed down,” he said, adding: “It is more sustainable which is a positive, but deep down, we love a booming market!”
Louis Alexander of The Bridgecrowd noted that a lot of people they speak to are “fearful of a Labour government” and this is causing them to put off big decisions such as buying a house or risking capital deployment in their business or new venture.
Louis also explained that, in his opinion, the proposed mansion tax is wreaking havoc with the minds of those who own or reside in properties and potential buyers are being put off from buying.
“This is all slowing down sales and having a negative effect on properties at this level,” he added.
Bob Sturges of Omni Capital has also seen that while Spring is usually the busiest season for people considering moving home or entering the housing market, the pattern has appeared to have been disrupted by uncertainty.
“All General Elections tend to disrupt 'business-as-usual'…Because of the peculiar circumstances of this election, the distractions have been greater than usual. Combined with an inefficient planning system in urgent need of reform, I'm certain the consent process has duly been affected,” he added.
Andy Knee, Chief Executive of LMS suggested that an outright majority in the general election is “highly unlikely” at this point, so the uncertainty is likely to continue until a government is established.
He also explained that it is unsurprising that with one of the most unpredictable elections in history approaching, there are a few jitters being witnessed across the property market.
“A prolonged uncertain period and a possible hung parliament is the biggest concern at this point for the property market,” he added as one of the main fears during this period.
“This is the tightest election in a generation, with polarised party agendas,” Andy added.
However, on the other hand, for Stephen Burns of Adapt Finance he doesn’t believe that the election this time around has made any difference whatsoever.
“It seems the general consensus is that each party is blending into one and it is those other than politicians who will shape our future,” Stephen concluded.
Everyone's talking about what will happen, but are we ignoring the changes right now? .
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