With the election fast approaching Founder and CEO of eMoov.co.uk and Brentwood First councillor, Russell Quirk, has put pen to paper with his thoughts on the current government and what impact each possible outcome of the election could have in regard to the property market.
The Current Government
It would be fair to say that under the tenure of the current Secretary of State for Communities and Local Government Eric pickles, and his predecessors, we have seen the lowest level of housing construction in the last five years since the 1960’s.
Post war Britain saw the construction of 300,000 homes a year, under the current government we have seen 135,000 per a year, a woefully inadequate shortfall of around 70-80 thousand homes a year.
A recent poll of MPs and the general public found that many believe that Britain is currently experiencing a housing crisis. There is a rather strong argument that the current government’s policies on the property construction, or lack of it, has contributed to this current crisis.
As a result the housing baton passed to the next government will mean they are at a disadvantage before they even start.
A Conservative Win
A Conservative win at the election in May would by enlarge result in more of the same where the property market is concerned. The Conservatives have made a real concerted effort to use the housing market as a tool to boost the wider economy which many people tend to agree with, but some not so much.
Where stamp duty is concerned a Conservative win would mean there is little danger of them reversing the amendments made in December 2014. Research by eMoov.co.uk has found that under their tenure, a Conservative government is twice as successful in seeing an increase in house prices, certainly a plus where home-owners are concerned.
A Labour Win
If Labour make a return to power then the implications for the medium to top end of the market start to become ominous. Anything above £500k and, particularly anything above £2m, could be in for a rough ride with the threat of a mansion tax.
The prime central London market is already in serious decline and if Labour introduce a mansion tax it could kill of the market altogether. With the stamp duty amendments already somewhat penal for anything above £1.5m (12%), a further, continuous tax could be the final nail in the coffin for many.
Although the wider market should go relatively unscathed, many will be cautious due to Labours history of mishandling the economy up until their defeat in 2010. However the positive implications of a Labour government in terms of their outlook on social housing could help address the current shortage of affordable housing.
A Lib Dem Win
The best possible outcome the Lib Dems could hope for is to prop up part of a coalition, beyond this there isn’t much hope for them. If or when they do, they will say or do anything their bigger partner wants in order to ensure the ministerial trappings of red cases and Jags for the daily commute in to Westminster.
They probably lean more towards a Labour view where the house market is concerned and were actually the first to propose a mansion tax, before Ed Milliband stole it from them.
A Coalition Government
It would seem the idea of a coalition government is more a question of who will form it rather than will it be formed. The most likely outcome is probably a Conservative and Lib Dem coalition, in which case the country will come full circle and end up back where it is at present where housing is concerned.
There is a chance of a Labour and Lib Dem coalition but it probably isn’t likely and there is an even slimmer chance we could see a coalition supported by the SNP or UKIP. This would provide quite an interesting dynamic in terms of influence around the cabinet and its consequences on the property market, however this influence may not necessarily be a positive one.