Well the votes are in, and the Tories have won the day. So what does the Conservative win in the 2015 elections, mean for the property market?
We asked some property professionals for their views.
Ian Westerling Managing Director of Humberts says: "A Conservative majority is a huge welcome sigh of relief for the Property Industry. Although the market usually takes a few weeks to settle post any General Election we expect hotter than usual Summer transaction levels as vendors who had previously held off are likely to 'push their buzzers'. The pent up buyer demand means that vendors of quality stock can feel reassured that an increased momentum is likely to be injected into the market over the next few months - as such, Humberts expects buyer registrations to increase by at least a further 20 per cent in the second half of 2015.
Although increased Stamp Duty remains an issue at the top end, the removal of the Mansion Tax threat is likely to inject some energy especially from foreign purchasers who should feel reassured that UK Prime Property still represents a safe haven for investment.
The Conservative majority is a sound result for the property industry as a whole, however we urge the party to stick to their promises and push hard to ensure home ownership remains a top priority over the coming 5 years."
James Wyatt, Partner of Barton Wyatt, had this to say about the holes in Labour's arguments: “Non-dom abolition. This [was] a good headline grabber for Labour. Tax the naughty rich who hide their vast piles of money overseas. The reality is rather more complicated, if only because no-one knows what the overseas income and assets of the UK based non-doms consists of. Least of all, how non-doms might react to this proposal. An upside of £1bn extra to the treasury is one estimate, but if enough non-doms packed up and left the UK, there could have been a net loss. By their very nature, non-doms are well advised, and there are plenty of measures they could take to avoid paying UK tax. But would they have left? Yes, plenty would have.
“Mansion tax. There is generally misunderstanding about this proposal. Labour wanted us to believe this was a tax on the stinking rich. But in fact, it would have been a tax on the wealthy, many of whom don’t roll around in piles of cash. For example – wealthy Home Counties family in a heavily mortgaged house worth £5m. Kids not burdening the state by being privately educated. Annual holiday might stretch to a couple of weeks in Devon. Mansion tax of £23,000 (let’s say) out of taxed income? Impossible. However, Mr ‘Russian’ who owns £10m house, as well as 3 others, mansion tax of £83,000 – not a problem. He is wealthy AND rich! But how many of these type of people are there? Not many. ”
“50% tax rate. The evidence is all there. A lower ‘top’ tax rate will encourage entrepreneurial types to invest in business. We have 0% inflation. We need investment and jobs. Not extra taxes.”
Heriberto Cuanalo, CEO of leading luxury student accommodation provider, Collegiate AC gives his take: “The UK is a global seat for excellence and uniqueness in higher educational learning. It is also a major foreign currency earner with the value of each international student studying at a UK university far exceeding the value of for exporting a car, or even several cars.
We very much hope that the incoming government maintains the tuition fee levels as they are, and the way UK students repay these only as a proportion of their financial success, so that non-governmental university funding does not decrease and lead to a vicious spiral of decline for UK universities as a whole whilst also increasing pressure on the public purse.
The past decade has seen a gradual expansion in purpose built student accommodation blocks, effectively private halls of residence. This has reduced pressure on general housing stock and created an engine for growth that has supported the UK construction industry and created dependable steady returns for institutions like pension funds in a world of volatility. The sector has also strengthened the UK university offering by raising quality, standards and choice at their University cities when they have been struggling to invest in accommodation.
I hope in the light of today’s election result this not only continues but continues to develop further still – the student accommodation market is changing in a positive way and I hope the outcome of Election 2015 further bolsters this.”
Jonathan Harington, Director at Haringtons UK, had this to say “The headlines are no mansion tax and there won’t be an exodus of non-doms (which we know from some of our clients would have happened). The most important thing is confidence and certainty.
No market likes uncertainty and people would be have been very reticent about going to the time and expense of moving house without knowing what the future holds.
The house building and rental market will benefit from lack of potential controls and will continue as free markets. Stamp duty will continue to stifle the top end of the market”.
Adam Day, Founder and Managing Director of leading full service online estate agency, Hatched, believes the housing market dodge a bullet, this is what he had to say:
“I believe this to be great news for the housing market, particularly in the short term, evading the potential surprises and uncertainty that a Labour majority or hung parliament would have created. With Labour having little influence, there will be no significant meddling in the housing market. This is a relief following what we saw with Labour giving months of notice before the launch of the Home Information Packs in 2007, which contributed to the financial crash in 2007/8. If we were faced with a Labour government today they would have enforced rent cap rises and banned tenants’ fees. Both of these proposed policies would have interfered with market forces, something that should never be controlled. With a Conservative government, it is ‘business as usual’ and I predict the market continuing to grow.
There are reservations though; the continuing growth of the market is a problem in itself and I do believe that prices are already far too high for buyers across the UK. I also believe passionately that everyone should have the chance to own their own home and all the help being offered to first time buyers, fuelling demand and therefore prices, means the Conservatives have not got it all right.
Now is the time for the Conservatives to really get to work, unhindered by a coalition setup. They need to address the real issues within the housing market, to free up brownfield sites and relax planning laws on the greenbelt to allow more housebuilding to increase supply. I would also urge ministers to think outside the box on how to increase supply. I said it in my own property manifesto – perhaps they should look to encourage owners of family homes whose children have flown the nest to downsize with tax incentives. This would free up a huge blockage in the system and increase supply.
Finally, the government needs to curb the constant building of flats. We are not short of flats in the UK. We are, however, in short supply of good quality family homes. With the supply of family homes lacking, those who would be looking to buy that type of house are not looking to sell and list their own properties, so this decreases supply towards the bottom of the chains.
With family homes being built and coming onto the market, the middle of the market will be freed up, which in turn, will help to bring more flats to the market, all of which would increase the supply to satisfy the demand that is out there for properties. With a balanced supply and demand, you would see house prices stabilise and perhaps even correct themselves a little.
From a small business perspective, the government has supported small to medium sized businesses hugely with useful programmes such as the Growth Accelerator scheme. I wholeheartedly applaud this policy as it has helped Hatched to grow from a company of just six people in 2010, to today employing 24 people across the country, with huge growth since 2010 across all aspects of our business. Coupled with this, the vast majority of our staff are under the age of 25 and have been employed either straight from school or out of university. Small business needs continuing support from the government and I believe that the outcome of the election gives small to medium businesses the best chance at increasing their positions as the employers of tomorrow.”