It would seem – judging by the latest research to be released by the Royal Institute of Chartered Surveyors (RICS) – that the housing market has some ground to make up having been dampened throughout the course of the election campaign.
RICS says that the trio of new buyer enquiries, new sales instructions, and agreed sales all fell during May, and that with house price growth also losing momentum it envisages a similar outlook for at least the next few months.
Path to uncertainty
What makes this interesting perhaps is that, while we would normally expect an election campaign to engender some uncertainty about the result, this was a process which began with the result looking quite certain.
Only as time progressed did the result become less knowable.
If the short-term future for the housing and mortgage markets do pan out as RICS has suggested, then we might think that the questions around the necessity of calling an election during 2017 will grow louder.
With a fixed-term Parliament in place, did Theresa May really need to secure her own personal mandate?
Perhaps she viewed the premiership of Gordon Brown as a recent lesson to be learnt in terms of holding an election early, to stop the snipes about not being elected as the new PM.
Can markets recover?
Recent history has told us that these markets do not react particularly well to elections and referendums.
This is the third consecutive year that we have seen this in action – add in the uncertainty of the Brexit negotiations to follow and you might wonder if a recovery can be formalised as effectively as in both 2015 and 2016?
Will lending figures in 2017 match those from recent years? Can the underlying strength of the remortgage market continue?
Will we see a recovery in buy-to-let purchase activity? How might first-time buying/high loan to value lending develop throughout the rest of the year?
These and many more questions will be on the minds of all mortgage market stakeholders once the dust has settled on this election, and that’s without thinking about what Brexit will look like.
Uncharted territory
These uncertainties will live on for months (perhaps years) to come.
I can’t help but feel that the decision to call the election this year has not just added to the worries, but in many cases exacerbated them.
What we do know is that the market has been resilient in recent times – I suspect it will need to be again as we move into uncharted territory.
