Since the General Election in December 2019, I have spoken to an immeasurable number of property professionals including developers, architects and planning consultants, who’ve said they are witnessing a bounce in the sector.
The conventional wisdom behind this is that the General Election has ended months of political and economic uncertainty stemming from Brexit and a gridlocked parliament. A lot of people are now talking about a ‘boom’ following the Conservative majority under the leadership of Prime Minister, Boris Johnson.
This begs the question, is this so-called ‘Boris boom’ a phenomenon, or are we getting carried away?
The latest data points display a strong uptick in activity since December, this is reflected in house prices according to figures from the Office for National statistics. Every region in the United Kingdom has seen prices grow after the General Election – the first since February 2018. The increased optimism from property professionals also seems to be real, as the latest figures from Zoopla show marked increase in confidence based on survey responses from 650 agents, with 55% saying they feel either ‘very confident’ or ‘somewhat confident’ in the strength of the market (following a three-year consecutive decline in this area).
The same survey also points to an increase in confidence among the general public. Trends like these certainly point to a ‘boom’ since the General Election.
Given this, perhaps a more pertinent question is not whether a ‘boom’ is happening, but how long will it last?
We’re only three months post-General Election and there is a strong chance that this could just be a knee jerk reaction to what we saw on the 12th December; an immediate sigh of relief in the sector from a country in economic limbo and political chaos. There is also the valid point that, while we may be seeing a ‘boom’, confidence may just be returning to levels seen before the EU referendum in 2016.
Ultimately and while this may be a dull conclusion to draw, it’s far too early to tell whether this is just a short term recovery or a long term re-adjustment. For the latter to happen and for the bounce to be sustained, this will come down to what caused the uncertainty in the first place, political events.
Whilst we have left the EU, we’re only in the early stages of the transition period and face ongoing discussions surrounding our future trading relationship; which could drastically alter the current direction we are heading in, reversing any post-election optimism depending on the outcome and soundings from both London and Brussels.
The direction of travel will also come down to choices made by Boris Johnson’s Government. The upcoming budget on 11th March will be a good indication of what we can expect to see next and ECF will be monitoring this closely.
With the recent appointment of Rishi Sunak following the re-shuffle, an apparent consensus on the era of austerity coming to an end during the General Election campaign and Boris Johnson’s mantra surrounding a One Nation Conservative Government, I am expecting a loosening of the public purse and big-spending commitments in the areas of housing and infrastructure. Particularly focused on delivery with the target of one million homes built by the end of the Parliament. The markets clearly think we are in for a treat with a noticeable rise in the pound immediately following Sunak’s appointment betting on growth enabling measures. Let’s wait and see.
If you have any questions on this article, feel free to contact Will Hamill at firstname.lastname@example.org.