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Snap election announcement unlikely to stall housing market – analysis

by: Heather Greig-Smith
  • 20/04/2017
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Snap election announcement unlikely to stall housing market – analysis
Initial reaction to the snap general election announcement suggests the housing market will not be adversely affected.

The Council of Mortgage Lenders said today that it does not anticipate that the prime minister’s decision to call a snap election will have a significant impact on market fortunes.

A CML spokeswoman added that historically there was little evidence that general elections had a demonstrable effect on the housing market. In addition, the Housing White Paper laid out the current government’s stance, making it unlikely there would be significant policy changes proposed in its manifesto.

“We will wait and see, but our assessment right now is that we wouldn’t expect a dramatic impact,” she said.

The latest consumer research by estate agent eMoov.co.uk also found that buyers and sellers seemed undeterred by the news, with the majority stating they would continue with their property transaction regardless of the general election or its outcome.

Of the 1,000 people polled by eMoov, 56.7% of sellers answered that they would be continuing with their property sale and the election news did not matter, 24.4% of those asked said they were undecided.

On the buyer side, 59.2% of buyers said the decision of a snap election did not matter and that they would continue to purchase a property, while 22.7% said the news had left them undecided.

 

Broker sentiment

Meanwhile, a United Trust Bank broker sentiment poll conducted earlier this month showed just 2% of brokers who responded expected the prime minister to call a snap general election shortly after activating Article 50 – 4% expected a cabinet reshuffle.

In a previous UTB poll, carried out in January 2017, 48% of brokers indicated that they had confidence in Theresa May (pictured) and her cabinet, compared to 40% who were nervous.

The majority of brokers were also in support of getting on with the business of leaving the EU with 71% agreeing that it was time for the process to officially start. Just 27% suggested it needed more time to be properly thought through.

United Trust Bank group managing director Harley Kagan said: “Although a snap general election will put the brakes on any further Brexit negotiations for another six to seven weeks, entering separation talks with a clear election mandate and longer term of government could strengthen Mrs May’s hand and help the prime minister to achieve the Brexit outcome she desires.

“Although a general election might normally add yet more uncertainty, a firm majority for Theresa May and the Conservative Party could bring more certainty for the UK sooner than expected. That’s something which would be welcomed by many businesses and individuals who still have no firm idea of what life outside of the EU is going to look like.”

Founder and CEO of eMoov Russell Quirk, said: “Since the vote to leave the EU we’ve seen the market remain remarkably resilient despite a degree of buyer uncertainty which essentially acts as property transaction kryptonite.

“Therefore, the eradication of questions around the legitimacy of the EU vote, a second referendum and any other opposition will only serve to buoy the housing market further and should see a large degree of stability return going forward.”

 

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