As we all acclimatise ourselves to the result of the General Election and the dust starts to settle, property experts are voicing their thoughts on how they see the result affecting the London housing market.
Here are reflections on what will happen in the PCL market from Charles Curran, Principal at Maskells Estate Agents:
“We have a hung parliament but also the prospect of a soft Brexit. A soft Brexit is good news for the economy and good news for the housing market.
Joining the EEA seems like a quick and sensible solution for Prime Minister May who now does not have the support to push through a Hard Brexit. The appointment of her old university friend and trusted advisor Damian Green, an advocate of remaining in the EU, testament to the fact that Soft Brexit now a real possibility. She would be ill-advised to push for Hard Brexit as Tory Remainers, armed with an new sense of purpose, would not accept this and the Prime Minister can ill-afford any parliamentary defeats.
A soft Brexit (or even better – joining the EEA) will produce greater and more rapid inward investment into the UK. This is essential for jobs and economic growth. It will also allow sterling to strengthen which in turn will reduce the costs of day to day goods (our imports will be cheaper) and if inflation reduces, may stave off a rate increase which would be a body blow to many homeowners as it would increase the cost of their mortgage today or at the end of their fixed term. We will however see a correction in the FTSE 100 whose earnings have been buoyed by overseas revenues which have increased due to the weaker pound. That said, fund managers whom I spoke with on Friday were all positive with the prospect of a soft Brexit.”
New homes in each party’s election manifesto will undoubtedly be delayed in the short term as the focus reverts to Brexit. This is also a very real danger that the “ask” by the DUP may be too great as they must be seen to be providing financial benefits to Northern Ireland and quickly. There is also the small problem of the Irish talks: the 1998 Good Friday Agreement commits the UK and Irish Governments to demonstrate “rigorous impartiality” in the talks which would be difficult with the DUP as kingmakers in Westminster. Might we see Sinn Fein take their seats in Westminster for the first time (7 MPs) and if so, how would they vote?
The question also remains if Prime Minister May is able to continue. We will have to see after the Queen’s Speech. However, in the unlikely event the Queen’s Speech is not passed, and Labour manage to form a minority Government OR if we see another election in the Autumn, Voters beware: a Labour government under Jeremy Corbyn will be polar opposites to New Labour and we will most likely see significant capital outflows from the UK.
Joining the EEA seems to us to be the best solution and if we do, it will provide for greater peace of mind for investors in the UK. If this happens, renewed confidence in the economy will lead to more property transactions which is ultimately what we all want working in this sector”