Following Boris Johnson’s election and a clear win for the Conservatives, share prices rose quickly for big housebuilders.
Bellway and Crest Nicholson saw their shares jump 11% and 9.6% respectively following the result being declared.
Urban Exposure chief executive Randeesh Sandhu said the Conservative majority was the “best result” for the UK property sector.
UK housing market recovery
It is widely hoped that the election result will drive a recovery in the UK housing market. The Conservatives have stated that they intend to focus on homeownership. The government’s Help to Buy scheme is due to finish at the end of 2023 and we do not know whether Boris Johnson’s government plans to offer a similar scheme.
The Conservatives have made it clear they want to continue to focus on first-time buyers. Initiatives and incentive schemes such as lifetime mortgages have been introduced for borrowers.
Dean Clifford, co-founder at Great Marlborough Estates (GME) said: “The Conservatives have been right to focus on boosting owner-occupation in their manifesto given homeownership remains the aspiration for the majority and any steps to help first-time buyers must be welcomed.”
Relief among the landlord community
Some concerns have been raised over the government’s intentions regarding the build-to-rent (BTR) sector. However, the fact that Labour’s rent controls will not come to pass has been met with relief from the landlord community.
David Smith, policy director for the Residential Landlords Association (RLA), said: “The election should also be seen as an outright rejection of Labour’s plans for rent controls.
“They would have undermined investment in the sector, choked off supply and made it more difficult for tenants to find the good quality homes to rent they need.”
Modest house price growth predicted
The RICS survey released this month after the election result showed the property industry believes getting Brexit done will boost demand in the housing market. Savills said that house prices are likely to grow modestly next year as some economic uncertainty will remain until the UK has reached a trade deal with the EU.
“We expect the housebuilding market to also be boosted by a resurgent UK economy in 2020, particularly as and when Brexit is resolved.”
Big players in development including London Square have welcomed the news and on the back of the result, announced that it would double its new homes pipeline to £2.6bn.
Adam Lawrence, London Square chief executive said: “This is great news. At last we have certainty with a majority Government in power. This is a time for great optimism and we anticipate a post-Brexit bounce in the market once the uncertainty of the past three years has lifted.”
“We will now be pushing ahead for significant investment in the land market off the back of this result the next two years, ready for the pent-up demand that will most certainly emerge.”