With the general election just around the corner and with the potential of a completely new government in Westminster in a matter of days, I was thinking just how this would affect the UK property market.
Economic and market commentators have differing opinions on this subject, and it’s very difficult for anyone to really know how the property market will respond to the various scenarios following May the 6th, but there are 2 main points that will have an impact, one of which has already happened.
The conservative party promised to abolish stamp duty for first time buyers on property purchases up to £250,000 if elected. The government introduced exactly this in the budget last month for a period of 2 years. It really makes no difference whose idea it was; the important thing is that this policy has without doubt had a positive effect on the property market.
Following the end of the stamp duty holiday earlier in the year we saw a significant slowing of the market, the introduction of this new policy resulted almost instantly in a strong rebound, so we can clearly see the effect this has had. I have always said that targeting first time buyers is the best way to stimulate the market. First time buyers form the market’s foundation and a strong foundation is essential in creating strength and stability further up.
If elected, a conservative government would make this policy permanent. In my opinion a very welcome move, although I suspect a Labour government would do the same as the 2 year point neared.
The Conservatives and Liberal Democrats have made their position very clear with regard to Home Information Packs (HIP’s); they would both scrap them. Strong evidence suggests that this would have an immediate impact on the number of properties coming to the market and the speed at which properties could be brought to the market. The expected increase would go some way to restoring more normal market conditions which would result in greater stability overall, and a stable property market is in everyone’s interest particularly property investors.
Steady long term growth is an essential factor in building an effective and reliable property portfolio. It is this that makes property such a safe and forgiving investment.
So who knows what the political landscape will look like on the morning of May the 7th. One thing we can be sure of though, is that a change of government will have an impact on the property market, and I am pretty certain it will be positive.
