As we approach the 2015 general election in the UK there has been a harsh lesson for the Labour Party which had proposed a mansion tax across the UK to fund 1000 extra nurses in Scotland. This move has created a backlash from English voters and placed the Labour Party in a very difficult position. There is intense speculation that this move was prompted by the recent Scottish referendum which resulted in a significant win for the Unionists. However, this is yet another example of how politics and property do not mix with many investors concerned that politicians seem intent on bringing property into the political arena.
Is property really a political football?
On the surface there is no reason why property should be used as a political football but if you dig a little deeper you will see that it often is. We have the Conservative Party looking to prop up what has been a difficult period for the UK economy in order to ensure that property prices do not fall before the election. In reality the Conservative Party is just following the general trend of previous governments in the UK which have all attempted to play the property market to curry favour with voters.
If we then move on to the Labour Party they have mentioned time and time again the potential introduction of a mansion tax but even when last in power they failed to follow through with many of their promises. The ongoing attack on the rich across the UK seemed to have hit something of a political note with Labour Party activists although any goodwill created by this move seems to have been negated by a promise to use funds raised to finance Scotland.
Will politicians ever learn?
Whatever side of the political fence you sit the fact remains that time and time again politicians use the property market to promise the world to voters. Property is used because many people, whether you own property or you rent, are impacted by price movements which effect standards of living and the cost of living. By encouraging activity in the marketplace this can push prices higher and by introducing “Victorian” style limits on rental agreements this can limit rent rises. However, in reality how many of these promises are fulfilled in full?
So, as we approach the next general election in the UK we can all sit back and expect more promises, more mudslinging and basically politicians saying everything they think we want to hear. Those in the property market have heard this time and time again and in reality whichever government is in power after the election this will have little real impact upon property prices and demand for property across the UK.
The only real lesson that politicians could learn is to fulfil promises to increase the number of new builds in the UK with the current new build rate literally hundreds of thousands a year behind the number needed. However, it would take a brave government to introduce a radical increase in the number of new builds because this would place more properties on the market. As a consequence this would reduce demand on individual properties and lessen “price squeezes” which often force prices to unaffordable levels.