IN the property world the run-up to an election is always a time of uncertainty
IN the property world the run-up to an election is always a time of uncertainty.
Even more so now because it’s the first time since the Seventies that we’ve gone to the polls under a coalition government and Thursday’s vote looks closer than ever.
It’s also exacerbated by the giant shadow of a potential mansion tax (Labour) affecting homes worth more than £2million, which would be felt particularly in London and the South East.
Experts have already highlighted a drop in prices in the run-up to the election (see chart below). Recent figures from Nationwide indicate a stuttering market where buyers are cautious of over-inflated prices and sellers may need to change expectations after ferocious growth a year ago.
Anthony Codling, housing analyst at broker Jefferies, who has studied the past seven UK elections, said: “On average, and when compared to the level of transactions at the time of an election, transactions have been higher in the period six to 12 months prior to and one to six months after an election. But the four months immediately preceding elections have typically seen housing transactions three per cent to eight per cent below the level seen at the time of an election.
“In our view, this confirms what we believe many intuitively believe; that the uncertainty regarding elections will delay a prospective homeowner’s decision to purchase a home.”
However, a stuttering market will always have regional variations - prosperous and sought-after Henley seems to have its own rules.
Stephen Christie-Miller, head of Savills Henley sales, commented: “Historically, it has always been the case that the closer we come to a General Election, the quieter the property market becomes.
“Once the outcome of the General Election is known and any ambiguity removed, buyers and sellers will be in a stronger position to make well-informed decisions about their property moves and this, in turn, will help fuel confidence in the market.
“However, the Henley market has continued to perform above the initial expectations we had at the start of this year with demand particularly strong for property priced up to £1.25m. Also, whilst undeniably more challenging, interest has continued for best-in-class properties priced above £2m.
“As is often the case, realistic pricing remains the vitally important key to selling success.
“Buyers have access to an enormous amount of information and aren’t prepared to even view a property if it is perceived to be either too expensive or blighted in any way.”
As for the parties themselves, everything seems on offer from a pledge to build one million homes on brownfield sites by 2020 (UKIP), to banning lettings agent fees for tenants in the private rented sector (Green Party). All parties appear in favour of building ‘garden cities’.
This is a fast-changing landscape, but the parties’ stances at the moment are as follows:
CONSERVATIVES are against the idea of an annual mansion tax and have doubled their pledge to deliver discounted homes for first-time buyers under 40, with 200,000 homes to be built.
They also want to deliver 10,000 new homes below the market rent and extend the equity loan scheme.
Party leader David Cameron said of his Help to Buy scheme: “As prime minister I am not going to stand by while people’s aspirations to get on the housing ladder are being trashed.
“If we don’t do this it will only be people with rich parents to help them who can get on the housing ladder — that is not fair, it is not right.”
LABOUR wants 200,000 new homes built each year by 2020 and aims to introduce a mansion tax to raise £1.2billion to fund the NHS.
They also want to encourage three-year tenancies to become the norm with a cap on rent increases and a ban on letting agents charging fees to tenants.
Just last week, the party also pledged to help first-time buyers with new plans to spare them from stamp duty and move them to the front of the queue for new homes.
Ed Miliband said: “It is simply too expensive for so many young people to buy a home today, saving up for the deposit, paying the fees and having enough left over for the stamp duty.
“So we are going to act so we can transform the opportunities for young working people.”
LIBERAL DEMOCRATS pledge to provide 300,000 new homes a year by 2020 and five new garden cities linking Cambridge and Oxford along a new railway line.
They support a High Value Property Levy and want to add an additional council tax band levy, to be collected by local authorities and then pooled.
The GREEN Party will end the Help to Buy scheme and build 500,000 affordable homes by 2020, by removing the buy-to-let mortgage interest tax allowance.
They also want to introduce a rent cap, Â remove letting agent fees Â for tenants and introduce obligatory licensing for all landlords.
UKIP plans to build 200,000 new homes a year, with one million on brownfield sites by 2025.
There are no plans to cap rent increases but they want to encourage landlords to rent to tenants on housing benefits, introduce three- to 10-year tenancies and reduce the cost of planning applications.
All in all, it’s not surprising the subject of property is one of the hot topics of debate and it will certainly play a role in what takes place on Thursday, May 7.