Worries remain about how high housing issues will rank in the next government’s in-tray, as professionals across the mortgage market told FTAdviser they are hoping for a post-election pick-up in activity amid a pre-poll lull.
Surveys recently have pointed to a slowdown in property sales in the final months of 2014, which some suggest is merely a usual pre-election slowdown, especially in the capital, but others place in the context of regulatory intervention including the Mortgage Market Review and loan-to-income caps.
Data published this month confirmed the slowdown has continued into 2015, with house prices falling 0.3 per cent between January and February according to Halifax while annual house price growth slowed for the sixth month in a row, according to Nationwide.
Speaking to FTAdviser, Alison Platt, Countrywide’s chief executive, said that while there has been a slow start to 2015, she hopes for some clarity come the election in May which could restart the recovery.
“Our view is that there is plenty of scope for recovery, but it’s unlikely to be a nice, steady march towards growth. The worst outcome would be a hung parliament, but regardless, we’re not holding off making strategic decisions for the business.”
Despite a second half slowdown, Countrywide itself reported a 52 per cent increase in operating profit last year to £85m. Ms Platt said that she was keen to accelerate growth organically by doing a better job with sales and support, but also did not rule out further acquisitions.
Sue Anderson, the Council of Mortgage Lenders’ head of member and external relations, commented that having looked closely at the impact of previous elections on the market there is typically a sense of uncertainty pre-vote, but usually quite a quick bounce-back to business.
“Wider market trends are also often hard to disentangle from election jitters, so I’m not sure if there’s a clear answer whether or not consumers factor it in... I don’t think there’s much evidence of it being a strong driver.”
Stephen Smith, director of Legal and General Mortgage Club, agreed that the potential impact of the general election result on the housing market is largely overstated.
“Life defining decisions like buying a house are not likely to be postponed because of an imminent election. This is especially true when so many of the fundamental aspects of the market are as they stand at the moment.”
He predicted it will be “full speed ahead” for the market whether the victors are Conservative, Labour or Liberal Democrat, as all three have committed to additional house building to a greater or lesser degree and interest rates looking likely to remain at rock bottom levels for longer.
“We expect gross mortgage lending to reach approximately £225bn, with house prices rising by about 8 per cent in 2015.
“As well as house price growth other factors such as new entrants to the lending market, the low interest rate environment and the changes to stamp duty rules should all act as a strong tail wind for lenders and the industry as a whole.”
A spokesman for Halifax was not willing to comment specifically on the election, but stated that the lender would continue to offer competitive products designed to meet the needs of all different types of borrowers.
Other providers were similarly non-committal on how May’s show of democracy would affect their strategy, with HSBC deeming the subject “too political”.
The Building Societies Association has not shied away, writing to the chancellor with a request that money raised from the sale of pensioner bonds be re-invested in helping those buying homes and particularly younger first time buyers.
The industry body also called for a cross-party 15-year plan for the UK housing market, based on national and regional long-term demographic changes, employment, environmental changes and infrastructure.
peter.walker@ft.com
