There is nothing like a knife edge election to drum up business for the UK property market as we have seen over the last few weeks. If all of the headlines and the concerns are to be believed, high-end property investors were ready to flee the UK amid concerns that a Labour government would introduce a mansion tax. Surprise, surprise, as last night’s exit polls showed a surge in support for the Tory party, property estate agents were this morning reporting increased interest in high-end London property.
Smoke and mirrors
Sceptics might be forgiven for suggesting that those trading in the UK property market would welcome volatility ahead of and after the election but perhaps they were genuine concerns? This time, more than any other time, the threat of a mansion tax by an incoming Labour coalition government seemed at its greatest. There were genuine concerns that a left-wing coalition between Labour and the SNP would decimate the high-end property market and especially the London arena. So what happened?
A vote for the Union
All of the election polls ahead of yesterday had Labour and the Conservatives flip-flopping the lead with the likes of the SNP, Liberal Democrats and UKIP trailing in their wake. Initial suggestions that the left leaning SNP would take all seats in Scotland were mocked by many but they did end up taking 56 of the 59 Westminster seats on offer. The Conservative party introduced a last-minute tactic of highlighting the damage a left-wing coalition government may do to the UK economy and the UK property market. So did the scare tactics work?
Protecting the recovery
It does depend on which side of the political fence you sit on as to whether you believe the previous government made any real inroads into reducing the UK budget deficit and instigating an economic recovery. Official figures from the IMF suggest the UK is one of the strongest economies in the Western world although there was a recent downgrade of expected short to medium-term economic growth. So, it does seem as though investors began to panic about how yet more spending and higher taxes from a potential incoming left-wing government might have impacted the economy.
Even the Conservative government has admitted that the UK budget deficit has not fallen far enough, that government debt continues to grow and there is still much work to do. However, talk of a potential £180 billion infrastructure investment by a left-wing government seems to have scared investors and scared the UK voting public.
Is it time to deliver?
David Cameron will walk away from his role as Prime Minister prior to the next general election giving him five years to deliver on his promises. It will be interesting to see how the UK property market performs in the short to medium term although whether high rolling international investors ever really took the UK property market off their radars is an interesting subject. The UK has for some time now been seen as a safe haven for property investors and it looks as though this will continue for the foreseeable future.