The country woke up this morning to the news that the general election resulted in a hung parliament, with no party gaining absolute majority.
The Conservatives remain the largest party but lost seats to both Labour and the Liberal Democrats.
It means that, once again, the UK faces uncertain times as we wait to hear whether the Conservatives will form a coalition with the Democratic Unionist Party, who won ten seats in Northern Ireland, if there will be a rainbow coalition led by Labour, or if the Government will take on some other form.
But what does the result mean for the housing and mortgage industry?
Early reaction from commentators is as follows:
“On reflection, I think the housing market has proved to be pretty resilient, all things considered. This is particularly true in terms of the last year and a half, with the Scottish referendum, the snap general election and Brexit. Although the mortgage market has reported a slight slowdown in the last couple of weeks in the run up to the election, this was to be expected, and now that the great British public has spoken, we must once again keep calm and carry on.
“Some buyers and sellers have recently adopted the wait and see approach and it is likely that the market will quieten down again next week while things start to settle down. However, as things start to unravel, I am hopeful that the market will soon get back to the norm. We must also remember that housing demand is still outstripping supply, people still want to own their own homes and lenders are still cutting interest rates. Ultimately it is these strong fundamentals that will continue to underpin the market.”
Just Mortgages and Spicerhaart group operations director John Phillips
“The UK was promised a period of stability but today’s announcement provides anything but at this stage. All markets abhor uncertainty and the housing market is no exception. The priority now must be for politicians to provide reassurance by forming a Government as quickly as possible.
“The housing market has already been the recipient of doom and gloom in the news this week and certainty is now required to inject confidence and increase fluidity across all levels.
“With Gavin Barwell gone, it will be interesting to see what happens to the long awaited Housing White Paper that disappeared from the scene since its publication in February. Regardless of how the Government is formed, it is clear from each of the main political parties’ manifestos that housing is a priority and so a clear strategy must be put in place to tackle the problems of supply, high transaction costs and affordability.”
Jackson-Stops and Staff chairman Nick Leeming
“The election result shows again that nothing is certain in politics. What we needed was certainty through a majority, what we are left with is further uncertainty through a hung parliament. The result could affect not only domestic policies but the whole Brexit process. The Conservatives need to form a Government in whatever way it can if it is to be ready for Brexit negotiations to start in ten days’ time and in order to stabilise the economy. Unfortunately until a new Government has bedded in, many areas that we as an industry wanted to see action on such as housing policy, may well take a back seat”.
Phoebus Software sales and marketing director Richard Pike
“A hung parliament will result in an extended period of uncertainty with decision-making kicked into the long grass. Theresa May is correct – we need a period of stability as that will quash uncertainty which is bad for the housing market – but it is not clear at the moment whether she can deliver it. Stability is crucial in enabling people to make big decisions such as buying and selling property.
“The hopelessness we are seeing on the ground about not being able to get on the housing ladder has come through. If there is one message that has come out of this election, it is that the young have voted overwhelmingly for change.
“Politicians will have to consider the needs of the young more than they have in the past which could mean more help for first-time buyers, perhaps extending Help to Buy so that it covers older properties as well as new build, dealing with affordability issues and more help on stamp duty.
“One thing all the parties agree on is that we need more housing so it has to be a priority for whichever formal or informal coalition is created.”
North London estate agent Jeremy Leaf
“As we awake today to the opposite of a strong and stable administration but to a rather unexpected hung parliament, I fear that the property market’s post-election return to normality that I’d hoped for may be rather further away still.
Political instability breeds procrastination on the part of homebuyers and sellers and for over a year now we have seen the effects of that on volumes, if not so much prices, as a consequence of the EU vote and then the snap general election.
A hung parliament means that Theresa May does not have the mandate that she sought for herself and for a ‘hard Brexit’. Whilst the Conservatives may be able to form a minority government propped up by the DUP in Northern Ireland, we now face the serious prospect of the selection of a new Prime Minister and then, probably, a further general election in the autumn.
So whilst the UK voter may understandably develop electoral fatigue, transactions in the property market may also stay somewhat anaesthetised until it’s re-awoken by something more politically and economically decisive than we have seen over the past 24 hours.
In addition to the prospect of Theresa May being forced out for grabbing humiliation from the jaws of victory, we will also see yet another Housing Minister in post by next week given that Gavin Barwell has just lost his Croydon Central seat. That’ll be our 6th Housing Minister in almost as many years.
Regardless, I suspect that the housing brief will take a back seat now, despite politicians’ promises in recent weeks, given the combined weight of negotiating Brexit, stabilising our economy, button-holing political support across the aisle on every vote and, inevitably, campaigning again for the next poll.”
eMoov chief executive Russell Quirk
“I don’t think the equity release market is hugely affected by short-term politics. The biggest effect that it could have would be if it changes care funding, especially if it means that clients have a charge put on their property by a local authority.
“But the biggest political impact on the equity release market relates to the housing market. If there is a hit to the economy caused by Brexit and that hits house prices, which it will, tat will affect the equity release market. As happened with the referendum vote, people thinking of selling often sit on their hands and do nothing.”
Sixty Plus equity release specialist David Wright