The result of the General Election, which saw Conservative leader Theresa May lose her majority, has left Britain shocked.
But what will it mean for the property market? While some experts think uncertainty may return to the sector, others think the property market will continue to remain strong.
Take a look at what experts have to say:
Housing market abhors uncertainty
Nick Leeming, Jackson-Stops & Staff chairman, said: “The UK was promised a period of stability but today’s announcement provides anything but at this stage. All markets abhor uncertainty and the housing market is no exception. The priority now must be for politicians to provide reassurance by forming a government as quickly as possible.
“The housing market has already been the recipient of doom and gloom in the news this week and certainty is now required to inject confidence and increase fluidity across all levels.
“With Gavin Barwell gone, it will be interesting to see what happens to the long awaited Housing White Paper that disappeared from the scene since its publication in February. Regardless of how the government is formed, it is clear from each of the main political parties’ manifestos that housing is a priority and so a clear strategy must be put in place to tackle the problems of supply, high transaction costs and affordability.”
Markets will remain resilient to election aftershocks
However, Andy Foote, sales director at Seven Capital, disagrees. He thinks the property market will remain attractive to investors following today’s election result.
“While the London market may be more sensitive to a change in central government, for the short term, growth markets will remain robust and resilient, delivering capital growth for investors,” Foote says. “Despite the change in government, the imbalance of supply and demand in the UK property market still persists.”
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Housing supply in focus
Adam Challis, head of residential research at JLL, thinks ministerial shake-ups including the loss of housing minister Gavin Barwell, will lead to uncertainty in the market.
“It will be crucial that the new champions of housing market policy in government can reaffirm commitments to the current policy direction rather than to create further disruption or uncertainty,” Challis says.
“Importantly for housing supply, the policy direction as set out in the white paper on building more homes across the range of tenures, will be upheld. Supporting new methods of delivery such as build to rent and off-site construction are also emerging and exciting sectors that will expand the pace of housing delivery.
“JLL believes the housing crisis deserves greater ambition and bold action from the new government. This requires cross-party support to de-politicise solutions and to provide longer-term backing for new solutions.
“We call on government not to lose sight of the key domestic policy challenges. It is vital that the UK government can forge a deeper commitment to housing supply solutions, recognising the common purpose of a wide range of stakeholders in the private sector.”
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Proposed new projects may be put on hold
Meanwhile, Hayley Scott from Investec Structured Property Finance, says the election result may have a significant impact on the real estate landscape.
“Volatility and uncertainty may return to the sector,” she says. “We expect sterling to initially fall sharply on the prospect of Brexit talks falling into turmoil putting further pressure on currency-linked inflation as import prices continue to rise.
“A number of proposed new projects may indeed be put on hold as the property sector takes stock of this result. Banks are likely to be cautious about financing new developments. Real estate as an asset class will lose favour with institutional and overseas investors as doubts hang over the UK real estate sector.”
Construction will slow down
Greg Hill, deputy chief executive at Hill, agrees.
“No business likes uncertainty and housebuilders like it least of all. This hung parliament and the horse-trading that will take place over housing policy to get a coalition in place means that many housebuilders will hit the pause button on their investment decisions,” Hill says.
“This is the exact wrong moment for a construction slow down. The country needs new homes desperately. We hope that the negotiations are concluded rapidly so that the new government is in place and ready to work with the sector to go out and get building.
“We will not be able to deliver 1m or more homes by 2022 if we don’t have a sufficient volume of skilled builders to construct them.”
Read more: How Brexit, the General Election and foreign demand affect London property
More international buyers will come to the UK
Matthew Turner, chief executive of Astute Property Search, predicts the UK will continue to woo foreign property investors if the pound slumps further.
“The British pound will weaken, providing international purchasers with the further opportunity to purchase with a favourable exchange rate,” he says.
“However, uncertainty will cause prospective buyers to stay out of the market, leading to fewer transactions going forward. The next few days will see negotiations which will decide whether we enter into a coalition or a minority Labour government and with Brexit on the horizon, the uncertainty is set to continue for the foreseeable future.”