Does politics impact property markets?

Whether you live in the UK, the US or any other part of the world where there is some kind of political instability at this moment in time, many are asking does politics impact property markets. When you bear in mind that politicians effectively run the economy, and run the country, you would assume that politics plays a major role in real estate markets. However, is this really the case?

Bluff and bluster

As we have seen over recent times, politicians will tell the electorate what they want to hear at the right time to get their vote. The last 12 months have seen promises of increased new house build numbers, more social housing and more affordable housing. These were issues very much at the heart of the last election and at the heart of many of the electorate. So, do politicians have a history of delivering on their bluff and bluster when they deliver their manifestoes?

Kicking policies into the long grass

If you look back in history you will see that many property orientated policies have been “kicked into the long grass” as soon as a government has been created. Issues which were to be addressed “immediately” are often forgotten and in all honesty many of the electorate tend to expect this. All political parties promised an increase in new build numbers, all political parties promised assistance for first-time buyers and all political parties were in favour of affordable housing.

New build numbers

Any politician can pluck a number out of the air and “promise” to deliver but the reality is that it is up to the marketplace. The only way to ensure that UK property prices continue to rise in the longer term is to starve the market of new build numbers which with increasing demand will squeeze prices higher. This is fact and something we are likely to experience yet again.

First-time buyers

The number of first-time buyers who are able to afford their own property has been diminishing for many years now and ultimately those looking to move into their own property are forced into the buy to rent market or shared equity. The problem here is that these two issues themselves bring more demand into the marketplace and squeeze prices yet higher.

Affordable housing

The issue of affordable housing is one which hits the headlines but is never really addressed with any great passion. Shared equity is an option for many people, indeed the only option, and social housing is becoming a thing of the past with ever-growing waiting list. The fact is that banks need to make money on their mortgages, and they need to ensure they are secure in the longer term, so while short-term government incentive schemes are welcome this does not answer the long-term problem.


We live in a capitalist society where the UK property market is one of the best performing in the world and perhaps one of the more stable. Issues such as a stable economy, stable political environment, ever-growing demand for property, a growing population, a lack of new build properties and the fact the UK is outside of the Eurozone have all come into play. In many ways the property market is the tale which wags the dog, the dog being the government of the day, because in order to continue governing, the politicians need to ensure there is sufficient funding to repay mortgages and maintain the value of property going forward.

Above all the bluff and bluster politicians roll out on a regular basis the property market does its own thing with long-term undiluted support from governments of the day.

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