I am writing in relation to ‘Which prime minister was the best for property?’.
While this tracks the good fortune of the property market during the reign of two of the longest serving PMs, Margaret Thatcher and Tony Blair, we are facing the fact that after 7 May, UK plc may be headed up by another coalition or a minority government. Bookies recently shortened the odds on no overall majority to 1/7, which translates as almost a dead cert.
Office for National Statistics research shows that elections have a positive impact on construction and housebuilding. Construction output has increased in the quarter following the great majority of the 15 previous general elections since 1955 - rising by a quarterly average growth of 2%. When it comes to property prices, the outlook is again positive, with price accelerating on average by 3%
in election years - up from 0.2% in pre-election quarters to 3.2% in election quarters.
Anyone who knows their political history will be aware of the 1974 double election scenario. That year saw a double dip for construction output, falling by 1% and 4% in the election quarters, highlighting just how vital political stability is to the economy and the devastating impact political uncertainty can have on our sector.
While the Conservatives and Labour both purport they can win a majority, the betting men say otherwise and I’m more inclined to believe them. Markets thrive on certainty, so while the certainty of a coalition government could be positive for our market, if no government, or a weak one, is formed, then as history has shown us, the industry could be brought to its knees and it’s unlikely that ours would be the only casualty.
So unlike any previous election, it is almost certain that we will not know who is running our country on 8 May, or even 9, 10 or 11 May. Despite all of our democratic checks and balances, the country’s fate will be decided behind locked doors and we will just have to hope that the government that emerges will be strong enough to prevent history repeating itself.
Mark Robinson, Group CEO, Scape Group