Mortgages  

Election result an 'adrenaline shot' for property

Election result an 'adrenaline shot' for property

The general election result could deliver a "massive adrenaline shot" to the UK property market, mortgage brokers have said.

Yesterday (December 13) the UK voted overwhelmingly for the Conservative party, boosting the party's position in the House of Commons by nearly 50 seats and providing its leader Boris Johnson with a majority of at least 78 MPs.

Andrew Montlake, managing director of broker firm Coreco, said the decisive result could deliver a "massive adrenaline shot" into the UK property market as buyers and sellers who had played it safe could now be putting their plans into motion.

He added: "Spring for the property market could come early after this comprehensive election victory. There is a huge amount of pent-up demand out there that looks set to be unleashed on the market next year."

He thought mortgage brokers would let out a "collective sigh of relief" and could look forward to 2020 with more confidence despite the spectre of Brexit.

The UK property market has been stagnant the past few years with property transactions slowly falling and average house prices telling a similar tale.

Economic and political uncertainty in the country has been touted as the underlying cause of the slowdown in the market, which has seen consumer site Which close its mortgage advice arm and Tesco Bank pull the plug on its mortgage lending service.

But David Westgate, group chief executive of broker and estate agent Andrews Property Group, said the election result could get the market out of this "current rut" and "turbocharge" the property sector.

He said: "For three years the property market has been gripped by political uncertainty and deadlock but now it can finally move on. 

“There’s every chance we are now at the beginning of a market cycle that may not peak until 2027 or beyond, with growth of around 4 per cent a year."

Chief executive of property lender Glenhawk, Guy Harrington, agreed, adding the result was "finally some light at the end of the Brexit tunnel" and predicted greater transaction volumes and a bound in the housing market.

But others warned the property sector should prepare for the potential for tax rises as part of the Tory balance sheet.

Jeremy Leaf, north London estate agent, said: "We should brace ourselves for some tax rises in the property sector because the Conservatives' pledges will need to be financed somehow."

CEO of Market Financial Solutions, Paresh Raja, said there were "plenty of question marks" hanging over the newly-elected government on whether there would be changes to taxes on property.

Others criticised the government's plans to hike stamp duty up 3 per cent for foreign investment.

The planned surcharge risked "hurting the London market" just as it started to recover, according to Dean Clifford, co-founder of Great Marlborough Estates, while the director of Benham and Reeves, Marc von Drundherr, said it was an "unnecessary attack" on foreign investment.