As we wake up today to a hung parliament, what does that mean for the residential housing market?

News

07 May, 2010

In the run up to the election, there has been a noticeable decline in the number of mortgage approvals. Between January and March there was a reduction of 30,000 applications in the UK compared to the previous three months.

Michelle Thompson, Senior Residential Property Solicitor at Forbes Solicitors thinks the reason for this may be, "Some buyers may have been waiting to see if there would be a further review of stamp duty following an election and sellers may have been waiting to see if Home Information Packs would be abolished".

Spring is traditionally a time when activity in the housing market peaks, but political uncertainty means we don't know which parties manifesto's will be implemented either in whole or in part.

If a stable coalition government is formed, that can keep interest rates and mortgage rates low, then this would be good news for the housing market. However if we return to higher inflation it would increase interest rates and mortgage rates which would depress the property market further.

Whatever the outcome, whilst mortgage lending remains restricted, this is likely to have a far bigger impact on the housing market, than whatever party or parties are in government.

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