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December 02, 2019
At a couple of events in November — a podcast and panel respectively — I was asked to give my thoughts on where the property market might find itself in five years’ time. I replied that, right now, we should forget five years altogether and simply focus on where the market could be in five weeks’ time.
The reason being, of course, the General Election. There’s no doubt in my mind that the result of next week’s public vote will have a massive impact on the property market’s direction in the medium term. If a Corbyn-led coalition makes it in, the outlook will be nothing short of bleak.
I’m with the people at Savills who reckon that if Corbyn gets the keys to Number 10, property values could fall by as much as 15% overnight in some areas of the country. That’s how much damage he has the potential to wreak on UK bricks and mortar. The man is anti-market and anti-profit to the core.
An insight into what we might be dealing with under a Labour Government came in the form of an egregious error in the party’s Manifesto. Essentially, in the business section of the Manifesto the authors confused turnover with profits. I was alerted to this by a journalist at The Times and my thoughts on it were quoted in the paper the next day:
“Confusion of turnover and profits is something you’d expect to crop up in a GCSE business studies exam, not a government Manifesto. If businesses were worried about the prospect of a Labour government, this kind of schoolboy error suggests they have reason to be.”
Interestingly, last week the Nationwide published a report into how General Elections in the past have not really had a material impact on house prices trends. But this time I would say things are different and that the result will have a material impact on price trends in 2020 and beyond.
For me, a strong Conservative majority has the potential to reignite the market whereas a Corbyn-led coalition could hit it for six. In next week’s General Election, the property market is fast approaching its most radical juncture for decades.
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