There are many people who won’t be thanking Theresa May for yesterday’s election and today’s hung parliament including her Housing Minister Gavin Barwell who lost his seat last night in Croydon Central.
But it’s clear from the property industry’s reaction to the hung parliament result that the political uncertainty that Theresa May has managed to pluck from the jaws of stability following the EU Referendum, is not welcome.
The housing market hates uncertainty – people buying and selling their most prized and valuable asset don’t like moving when an election is looming, and particularly when it’s the third national vote in two years.
RICS released research yesterday revealing the damage that the election had already done to the property market. It said that a drop in the number of properties coming on the market during May had been “exacerbated by the General Election, as some adopt a ‘wait and see’ approach”.
“In May, 25% more respondents cited a decline in fresh listings (compared to those reporting a rise), producing the most negative reading since July 2016,” the RICS report said.
Nick Leeming, Chairman, Jackson-Stops & Staff
“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.”
Carol Pawsey, Lettings Director at KFH
“The spotlight is firmly on the rental sector as a key component in shoring up housing supply. The new government, however it is compiled, needs to ensure we have a balanced private rental sector that attracts investors and landlords to the market while looking after the long-term interests of the increasing number of tenants looking for quality long-term rental homes.”
David Westgate, Group Chief Executive at Andrews Property Group
“Whilst the fact that no one party in Parliament has an overall majority could be viewed as a bad thing which will see uncertainty continue, the fact that there’ll be more cross-party debate should be welcomed by those in the property sector.
“Housing should be above politics and a hung Parliament could see more de-politicised debate take place. This should be welcomed.
“We need to ensure that more properties are built and that the conditions are in place to make this happen, whilst developers are given the confidence to progress with new projects.
“We also need to see an increase the supply of properties coming on to the market and one way to achieve this would be via an urgent review of Stamp Duty which none of the main parties committed to before we went to the polls – now would be a good time to make that commitment.”
Adam Challis, JLL
The first agents to comment on the result include JLL, whose head of research Adam Challis said he thinks the housing market requires “greater ambition and bold action from the new government”.
Commenting on the uncertainty a hung parliament will bring, he said: “the short-term impacts are uncertain and this could drag on housing market activity if clear political leadership does not emerge quickly”
“It is likely that we will see some ministerial shake-ups in the coming days and weeks.
“For the most part, big changes would be unfortunate with respect to senior housing market posts, notably the loss of Housing Minister Gavin Barwell.
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.”
Martin Bikhit, MD of London agent Kay & Co.
“The likelihood of a hung parliament seemed remote at the start of the election campaign, but that is the reality to which we have woken this morning. Whether we end up with a minority Labour government, or with a formal coalition, as in 2015, will depend on the various negotiations that will take place in the next few days. Cool heads will be needed and a period of political uncertainty – hopefully, not prolonged – seems inevitable.”
Michelle Niziol, MD of Bicester agent IMS Property Group
“We continue to face days and weeks of uncertainty with the outcome of the election being a hung parliament and with the former housing and planning minister having lost his parliamentary seat,” she says.
“Any newly formed Government will need to work closely with organisations within the property industry and other sectors to deliver a successful housing strategy for the years to come. More affordable housing to buy and rent, a reformed Stamp Duty system so that sellers take on the cost rather than homebuyers, and measures to speed up house building and delivery of infrastructure, should be high on the housing agenda of any Government.”
Matthew Turner, CEO of home finder Astute Property
“With a hung parliament, we are now likely to see more instability in the market and economy. The British pound will weaken, providing international purchasers with the further opportunity to purchase with a favourable exchange rate. 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.”
Jason Rishover, CEO of home counties builder Heronslead Group
“This shock result means that all the uncertainty surrounding the housing market and the lack of confidence in buyers will continue. The country will not have a clear direction for some time, and it will be time consuming and challenging for both parties to agree on policies. Brexit will now be much more problematic.”