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UK General Election and the Housing Market [VIDEO]

The UK general election was called on 18 April. Unusually, news of the UK general election was not leaked, preventing a lengthy build-up in the housing markets. Virata Thaivasigamony, spokesperson of CSI Prop shares his views on the subject.

Click on CC for subtitles. Or else, feel free to read the full transcript below:

The Prime Minister’s call for a UK general election in (less than 6 weeks) was a surprising one. There are pros and cons, of course. The UK general 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. 1 thing 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. 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, reversed its stance, citing the election as a game changer.

We at CSI Prop predicted that the pound would drop immediately after Brexit 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 be uncertainty leading to the elections. Major decision-making 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 UK general election that was leaked. This prevented a lengthy buy-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 UK general 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 ask for a more moderate deal for Brexit without being beholden to groups interested in a hard Brexit, 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 investors taking advantage of the favourable exchange rates.

It’s premature at this point for anyone to guess who will win the UK general 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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CSI Prop proudly promotes international investment property with high yields at low risk. Our portfolio comprises residential property in cities across the United Kingdom (London, Luton, Manchester, Liverpool, Newcastle, York, Glasgow, Scotland; Sheffield, etc); Australia (Melbourne, Perth, Brisbane) and Thailand (Bangkok). Our projects are concentrated in high-growth areas with great educational, infrastructural and job growth potentials. We aspire to make a difference in the lives of our clients by helping them achieve their investment goals through strong market research backed by third party experts. 

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