With Boris Johnson and the Conservative Party winning a huge majority in Thursday's General Election, people will be wondering what is in store for the property market. We canvassed opinion from some of Britain's top estate agents.
For the last few years, estate agents have repeatedly grumbled about the uncertainty of Brexit casting a shadow over the property market. The industry has been far from unique in that, of course: all businesses, big and small, have been affected.
But it’s not just business. Tens of thousands of people have been putting their plans on hold, re-thinking their decisions to upgrade, downsize or even refurbish and extend property, while not knowing which direction the country is heading in.
Whether you are delighted or dismayed at the outcome of Thursday’s poll, it’s certainly a game-changing moment on that score at least: the Prime Minister’s majority is such that he’ll be able to do whatever he likes. The big question is what on earth that will mean, for property or anything else, since the Tories’ tissue-paper-thin manifesto barely gave any detail on anything except Brexit. So we asked the experts for their best guesses about what comes next for the property market in Britain.
Savills: Strong build-up of demand among those waiting for the fog to clear… but the uncertainty isn’t over yet
‘We know that across the mainstream market, political and economic uncertainty have held back market demand and supply being brought to the market. Within the prime markets in which Savills operates, there has been a strong build-up of applicant demand among those waiting for the fog of political uncertainty to clear…
‘The election of a Conservative majority government is in line the assumptions which we made when we prepared our house price forecasts back in November. These suggest only modest price growth in 2020 on the basis that, despite domestic political uncertainty receding, some economic uncertainty will remain until a trade deal is agreed with the EU… This could mean a bounce in demand in the first part of 2020 proves difficult to sustain.’
Lucian Cook, Director, Residential Research, Savills – read full blog
Knight Frank: The sellers who have been waiting will move in — but buyers will want to raise their prices because of that
‘This will, for the time being, end the uncertainty of a no-deal Brexit and pave the way for the release of some of the pent-up demand that has built in property markets in recent years. The extent to which this translates into transaction activity in the short-term will depend on the size of the pricing expectation gap between buyers and sellers.
‘Supply is likely to rise as political uncertainty recedes and private and public spending stimulate the UK economy. This will put downwards pressure on prices, however some vendors may expect a bounce in prices, which may create a stand-off between buyers and sellers as the market re-prices.’
‘A shortage of supply in the lettings market may be further exacerbated as owners attempt to capitalise on any perceived ‘bounce’ and list their property on the sales market, which would put upwards pressure on rental values.’
Liam Bailey, Global Head of Research at Knight Frank
Jackson-Stops: The government must make housing a priority — and needs to cut stamp duty
‘Over the last few years, both buyers and sellers have done well to adjust to the ongoing uncertainty facing our country, yet we hope that today’s result will finally provide some reassurance to the property market.
‘In the lead up to Boris being elected Prime Minister, he spoke widely about stamp duty cuts for UK residents, yet this quickly fell by the wayside as he settled in to No.10… [it was] disappointing to see the party’s manifesto only focussed on increasing the amount of stamp duty payable for non-UK residents – done in an attempt to take the heat out of the property market.
‘If we are to give the economy the much-needed boost it needs, what we actually need is to reduce the burden of stamp duty across the wider UK housing market… the government needs to provide far greater support to key demographics such as first-time buyers, young families and downsizers.’
Nick Leeming, Chairman of Jackson-Stops
Fine & Country: We’ll get short-term stability — but the next round of Brexit negotiations bring new uncertainty
‘The new majority Tory government gives the market the look of stability for the short term, and it remains to be seen how the next round of Brexit negotiations affect the property market overall. Generally we expect to see the property market modestly rise whilst mortgage rates continue to be low.
‘While politicians traverse the stormy seas, we still need homes to live in, to send our children to schools and to be able to travel to our places of work. I suspect the majority government will give the market some reassurance of direction the country is going in.’
Dominique Scott, Associate Director, Fine & Country
Property Vision: Sellers will be ‘rubbing their hands with glee’
‘I’m sure all my friends in [estate] agency will be quick off the mark to predict a new bull run in our markets and while this is definitely good news (because a different result would have been very damaging), buyers launching themselves into the market today will soon be reminded that stamp duty is still cripplingly expensive… While we will be busy with buyers who have been sitting on their hands for a while, and transactions will pick up, the structural issues in the market remain the same and boom time is unlikely.
‘Also, vendors will feel strengthened by this so I expect a period of adjustment where buyers and sellers try to work out what this means. Sellers will be rubbing their hands with glee today but I don’t think this is a time to get greedy because again the issues remain the same and there are still choppy waters to cross with Brexit and stamp duty.’
Roarie Scarisbrick, Partner at Property Vision
OnTheMarket: Brexit clarity will restore confidence amongst ‘wait and see’ buyers and sellers
‘Brexit uncertainty has long been a drag on buyers, sellers, landlords, tenants and agents who have been working in challenging conditions to help keep the housing market moving. This has been against a backdrop of failed promises across successive governments to impact the market while Housing Ministers have come and gone through a revolving door.
‘From today, we hope that the housing market benefits from greater political clarity to restore confidence amongst those ‘wait and see’ buyers and sellers who have put their plans on hold.’
Ian Springett, Chief Executive Officer of OnTheMarket
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