Brokers react to election result
Brokers have been voicing their support for the Conservative Party’s election win, with many predicting it will boost the housing market.
Boris Johnson’s party took 364 seats versus Labour’s 203, prompting a strengthening of the pound and surge in UK shares this morning.
Coreco managing director Andrew Montlake says the result could deliver “a massive adrenaline shot into the UK property market”.
He believes that the spring bounce could come early in 2020 as buyers who have postponed their plans finally get moving and this could be the start of a long Brexit bull run.
He says: “Not so long ago, Brexit looked like bad news for bricks and mortar, but people will now be relieved it can finally be put to bed.”
Ash-Ridge director Jane King is “absolutely thrilled with the result”.
She says: “Now that we have a Conservative government that has promised to get Brexit over and done with people can move forward with their plans and we can move forward with our plans as a business.
“I have already had calls this morning from clients who were dilly-dallying with house purchases who have now decided to move forward and take advantage of low mortgage rates.”
While King is optimistic about the impact of the election result on the health of the property market, she is less enthusiastic about the housing policies promised in the Tory manifesto.
She says: “In terms of long-term fixed rates, I don’t think they really work in the British market as people’s lives are too fluid, moving from job to job and house to house.
“It is not in our DNA.”
She is not a fan of plans to help shared ownership borrowers increase their stake in properties in smaller increments of 1 per cent.
“It sounds great in theory but in practice it is not worth doing.
“Even where you are staircasing up by 15 per cent the legal fees and valuation can come to £600, so the costs of increasing your share by a smaller percentage would outweigh the benefits.”
Trussle mortgage expert Dilpreet Bhagrath is hopeful that mortgage activity will pick up following the result.
She says: “Political uncertainty has gripped the housing market for the past three years with many holding off buying and selling, and as a result, there’s been a recent fall in mortgage lending.
“The reassurance that comes with a five-year administration may encourage those prospective and current homeowners who had previously adopted a ‘wait and see’ approach.”
Trussle is calling on the new government to move forward with plans to tackle the mortgage loyalty penalty and introduce a mortgage switch guarantee to make it easier for borrowers to move lender.
Habito chief strategy officer Martijn van der Heijden also believes the result will have a positive impact on the property market.
But he says: “Perhaps the single biggest concern is that looking ahead to 2020 and the coming Parliamentary timetable, housing is going to struggle to make it to the top of a very busy priority list, as Parliament grapples with January’s Brexit deadline and the new political landscape following this general election.
“Until the time is found to resolve the core housing issues around affordability and accessibility, fundamental barriers to many people’s dream of homeownership will remain.”
London Money mortgage consultant Catherine Beaumont says: “While I am not normally a Conservative voter, I think there has been a large tactical vote to get Brexit done and at least now we know that we are leaving.
“If there had been a hung Parliament or a Labour government it would have created another three or four years of uncertainty.
“December has been a quiet month, but hopefully now confidence will start to pick up so I think this will be a positive step.”
However, Beaumont is not keen on Tory plans to push for longer term fixed rates.
“I’m not an advocate of fixed rates of more than five years and I never advise on 10-year fixed rates as the early repayment charges are astronomical.
“I think we may see a shift in borrowers’ attitudes to fixed rates if consumer confidence improves.
“We might see that five-year deals become less popular as people do not feel such a need for long-term security and start looking at two-year deals again.”
JLM Mortgage Services director Rory Joseph is relieved to see an end to the paralysis and indecision that has weighed so heavily on confidence.
He says: “Regardless of your own feelings about the UK leaving the EU, we live in a democracy and the will of the people has to be sanctioned.
“Our economy has stalled due to a lack of decision and direction, and therefore the Election should hopefully allow businesses to make the investment they need to, plus allow the public to move forward with their plans. It is positive that we now have a resolution.”