Apparently we’re at the start of a General Election campaign – and there was me thinking it had begun about 12 months ago. The first of the leaders’ debates – which somewhat paradoxically wasn’t actually a debate between the leaders – was deemed to be the end of the phoney war as Cameron and Miliband traded blows without actually ever speaking to each other. Do you get the feeling this is going to be one of the oddest General Elections in recent memory?
The debate did clarify one thought in my mind though, namely the battlegrounds on which the Election will be fought on – unsurprisingly the Conservatives will be saying, “It’s all about the economy stupid”, while Labour look likely to focus on welfare, social justice and the future of the NHS. Wrapped up in the economy issue is of course the housing market, and it looks pretty clear that the supply of housing and dealing with the ‘housing crisis’ is going to be as big an Election issue as it ever has been.
For perhaps the first time the main political parties are going to need to spell out how they can support greater house building in the UK and how we might get towards the ‘holy grail’ figure of 250,000 new homes every year. In tandem with this is of course the supply of mortgage finance to enable new homebuyers to get on the ladder, and to allow second-steppers and the like to move up. The recent Budget announcement was pretty light in most housing areas however the launch of the Help to Buy ISA is further recognition of the problems most first-timers have saving an adequate deposit in order to gain a mortgage. At least this Government has (perhaps belatedly) recognised that not everyone is fortunate enough to have access to a Bank of Mum & Dad.
But what of our sector and its wish-list for the next Government? To be fair to the Coalition Government it has placed the housing and mortgage markets on something of a pedestal over the past five years. Not only did we have the Funding for Lending Scheme, but we then had Help to Buy in both its forms, the rolling back of planning permission, freeing up of development sites, followed by the stamp duty threshold changes and now further intervention in terms of new garden cities/housing zones, and the Help to Buy ISA. If you had told us in 2010 that we would have received such concerted and focused support then most would have been happy.
Transaction levels, certainly since the start of the year, appear to have plateaued if not dropped however there are a number of mitigating circumstances around this not least the Election itself with potential purchasers – notably buy-to-let investors/landlords – hanging fire on purchasing until they know the result. Our own figures for instructions however have improved significantly and we fully anticipate continued growth especially during the second half of the year when (hopefully) we will have political certainty and a clear idea of what the next Government plans to focus on.
And this is the big issue over the course of the next month or so – the result of this Election is simply unknowable and to coin a phrase, most markets deplore a vacuum. Therefore until we get the result and we’re clear about what comes next, it’s likely we will see a tempered housing market. The ‘good news’ is that the Election result (at the time of writing) is only five weeks away, unless of course there is no definitive result and we need a second Election shortly after. I’ll leave you with that cheery thought.
Harpal Singh is managing director of BrokerConveyancing.co.uk