Reaction to this morning’s shock election result is starting to trickle in, as the property industry assesses the impact of the impending Conservative government.
Savills’ UK head of residential research Lucian Cook said with an effective Conservative majority, or Conservative-led coalition now looking like the most likely result, he expected much of the deferred demand from the pre-election period to flow back into the prime market over the remainder of 2015 and 2016.
This would be particularly buoyed by the fact that there will no longer be a mansion tax introduced on high-value homes.
“On the supply side, it will still take some time for the high levels of available stock that have built during a long period of pre-election caution to be absorbed and we expect that would-be sellers who had adopted a “wait and see” approach pre election will now bring more stock to the market,” he said.
Mat Oakley, Savills head of European commercial research, said the commercial investment markets have been largely unmoved by the election campaign.
“The perception that the UK is still a strong and stable investment destination has continued to intensify and non-domestic investors have widened their focus to include markets outside London,” he said.
But he warned there were “lurking political concerns” which might affect the market if non-domestic banks facing shareholder pressure to redomicile outside the UK decide to leave. An EU exit would also have a “damaging effect on London’s attractiveness to US and Asian businesses who are looking for a European HQ”, he said.
Melanie Leech, chief executive of the British Property Federation, said: “We would like to see the government prioritise a coherent plan to deliver increased housing supply; to follow through on the commitment to fundamentally review business rates, and take action to put in place the right infrastructure – including real estate – that will allow our country to thrive.
“The prospect of an EU Referendum will inject uncertainty into the equation, and it is important to have clarity about its parameters and timetable as soon as possible.
“Our industry has the potential to significantly increase the amount of housing in the UK, regenerate our towns and cities, and contribute significantly to the economy if it is provided with the right legislative framework, and we look forward to working with the next government to achieve this.”
Ed Mead, executive director at Douglas & Gordon, said a 10 year residential investor window has now opened as Labour will have to swing back to the centre.
“The general election result will restore overseas investor confidence in the UK, and UK real estate assets, leading to a surge in capital values over the next five years.
“This is a very bullish outcome for London real estate markets at all price levels,” he added.
Miles Gibson, head of UK research at CBRE, said: “With such a slim majority it almost feels like we’re ‘back to the 90s’ but the overall economic outlook remains favourable. Strong employment, low inflation, low interest rates and high levels of inward investment all bode well for the property sector.
“There remains, however, a question mark over Cameron’s ability to secure a referendum on EU membership, a referendum which bothers most of our clients immensely as they feel investment would suffer if we were to leave the EU. Even though we think the PM would campaign for an “in” vote and would ultimately win, the sooner the new PM can resolve this issue, the better.”
Guy Grainger, UK chief executive at JLL, said: “While most in business will be reassured by the continuity of the Conservative economic plan, there are concerns regarding the planned referendum on British membership of the EU in 2017. British businesses will remain committed to a strong position within the European Union and will need to engage in the reform debate to see if a referendum can be avoided.
“However the continuity of main policy objectives for the past five years will be very helpful for investors and developers in the housing market. Residential markets will benefit from a legacy of supportive policy from the coalition government. We expect markets to continue to grow in line with stronger economic prospects, particularly in the regional cities and the South East.”
Alison Platt, Countrywide chief executive, said: “Now we have clarity following the General Election, we expect there to be greater activity in the housing market, especially in the £2m plus markets facing the prospect of a mansion tax.
“We anticipate this Conservativ-led government to turn its attention from implementing policies that stimulated demand in the housing market to addressing the lack of housing supply. Sticking to its pledge to boost housebuilding through the provision of more affordable housing and more garden cities should prove welcome.”
Alan Brown, chief executive of housebuilder CALA Group, said: “The final election result is good news for the UK housing market as the Conservative party has shown that it truly understands the intricacies of the housing crisis and is clear on how to address the UK’s chronic shortage of new homes.
“I am pleased that the UK economy can now return to business as usual, without the election distraction of the past few weeks.
“With the Conservatives remaining at the helm, this guarantees a level of political continuity that is beneficial for both consumer and market sentiment alike.
“However the new government should take this fresh start as an opportunity to further enhance some of their key policies, without the need for coalition negotiations.
“While it is a big positive that the NPPF will remain in place and therefore can continue to improve the UK planning system, I believe the framework needs to be strengthened further.
“There should be a renewed focus on speeding up the clearance of planning conditions, which are making the implementation of planning permissions slow and difficult, while encouraging local authorities to bring forward more developments to increase the housing supply in their communities.
“Meanwhile UK Green Belt restrictions need to be reviewed so that the Green Belt becomes a larger consideration in local development plans, ensuring that its scope and size is assessed more realistically alongside the needs of the local community.
“The SNP’s success in Scotland is no surprise, particularly given the significant hit that Scottish Labour took following last year’s referendum.
“We don’t anticipate that this result in Scotland will have any adverse impact on the housing market north of the border, but instead we expect to see some positive increases in homebuyer demand as election fever abates and normal market conditions return.”