It comes as no surprise that property is high on the political agenda in the lead up to the snap General Election. As one of the most compelling narratives of the UK economy, residential real estate harbours ramifications for the entire population, and is a topic that incites much debate.
If political pundits are to be believed, the country is set to deliver the Conservatives a second consecutive win and, this time, with a very healthy majority. If Theresa May is to be trusted, this should bring with it greater economic performance, unless Brexit negotiations go awry.
But more than anything, the market needs a few years of stability. Whatever your political persuasion, three years of political upheaval has had a detrimental effect on the domestic residential market.
The ensuing climate of uncertainty has caused many homeowners to pause for thought, adopting a ‘wait and see’ approach before making a move.
Crucially, it hasn’t just been political turbulence that has slowed the volume of transactions – it’s also been policy. The revised Stamp Duty tariffs introduced at the end of 2014, ostensibly to curtail activity at the top end of the market and stymy house price growth, have hit the London market profoundly.
After all, many of those targeted by the tariff are ‘accidental millionaires’, who might live in property valued at seven figures, but who also balk at the idea of a Stamp Duty bill in excess of £43,000.
Until now, some of this inertia in the domestic market has been offset by a devalued pound that has made the UK, and London in particular, attractive to overseas buyers looking for value.
But this initial trend has developed into an over-dependency on overseas investment. This has continued despite attempts to motivate the domestic market with the lowest interest rates since 2009, coupled with favourable borrowing conditions.
This is why many from across the real estate spectrum have spoken in support of the election, suggesting the prospect of no further polls until 2022 will allow for greater political and economic stability in the long term.
This could initiate a positive shift for residential property and create the right conditions to encourage increased activity amongst domestic buyers and sellers.
Regardless of whether there is a momentary hiatus in property transactions in the run up to 8 June, the election is a gamechanger for Brexit negotiations and the future of our economy.
Let’s hope the result changes things for the better.
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