UK Housing Market & the Election 2017 |

The Prime Minister’s call for a snap election
in (less than 6 weeks) was a surprising one. There are pros and cons, of course. The snap election is an opportunity for the
new government to create policies and a clean slate to do something for the voters. We all know that the no. one issue on voters’ minds are housing affordability
and shortage of housing. On the day of the Prime Minister’s announcement,
the pound dropped then rose to its highest level in weeks. In fact, it’s been on an upward trajectory
since then. IMF revised its prediction of the growth of
the UK economy from 1.5% to 2%. Even Deutsche Bank, who has been very critical
of the sterling, has reversed its stance, citing the election as a game changer. We at CSI Properties (Cornerstone International)
predicted that the pound would drop immediately after Brexit and then rise — which is exactly
what happened. It is our sense that the pound will continue
to rise over the coming months. The UK housing market has been a resilient
one over the years. However, there will of course be some uncertainty leading to the elections. Major decisions may be put on hold until the election results are out. But the uncertainty will be relatively short
as there has been no news of the election that was leaked. This prevented a lengthy build-up that would
have otherwise affected the housing market. Ultimately, there is a critical shortage of
housing in the UK. Demand continues to outpace supply, so it’s
only logical that for many years to come, prices will continue to remain high. However, the snap election is an opportunity
for the new government to start on a clean slate and make changes that will affect the
housing market. Of course, we hope that the government will
revisit policies affecting landlords, foreign investors, and the buy-to-let market. After all, these people are key to ensuring
housing supply in the UK. Theresa May’s domestic agenda is to “build
a country that works for all”. It is our sense that if she wins, she will
have more flexibility to make compromises to cut a more moderate deal for Brexit
without being beholden to groups interested in a hard exit, or even support from her
very own party. This should have a positive impact on the
UK economy and the pound sterling which is great news for any investor taking advantage of the favourable exchange rate. It’s premature at this point for anyone to
guess who will win the election. We will of course continue to monitor developments
in the market and keep you posted. Suffice it to say, regardless of who wins,
the housing crisis and shortage of housing (in the UK) isn’t going anywhere.

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