June spells the end of May: what this means for property

May 24, 2019 / Isla MacFarlane
June spells the end of May: what this means for property

It’s her party, and she’ll cry if she wants to: predictably, May’s premiership has ended in tears, but should housebuilders be drying their eyes at her departure?

Recent ONS and PMI data which point to a wobble in the construction industry, with Brexit uncertainly taking the blame. A new leadership contest will do little to sooth the jittery markets.

“May’s resignation delivers a significant blow not just to the government, but the property sector at large,” said Paresh Raja, CEO of Market Financial Solutions. Our politicians have failed in their attempts to manage Brexit, and with the Tories now preparing for a leadership contest, this poses more questions than answers.

“At this critical point, what the UK now demands is the leadership and resolve to ensure that progress can be made. Failing this, businesses and investors will remain in the dark, unable to plan for the future. The UK is currently facing one of the country’s biggest housing challenges, and with a divided government, there is a real risk that this fundamental issue will continue to be overlooked.”

However, the sword of Damocles has been hanging over May’s head for many months, and her departure could offer a little assurance to nervous property investors.

Jamie Johnson, CEO of FJP Investment, said, “Uncertainty does not bode well when it comes to implementing a financial strategy, and for nearly three years, investors have been left in the dark with little guidance from the government. Now, with Theresa May’s resignation, we will no doubt see some movement in financial markets as they react to this news. However, this is not a cause for concern, as there could be greater long-term benefits of today’s announcement.

“Once the markets have adjusted to the news, the government has the opportunity to use the leadership contest as a means of delivering greater certainty over Brexit. By knowing just what options are on the table, investors will be in a better position to effectively plan for the future. This means appointing a leader who can unify the Tory party and provide the leadership and guidance the country is currently calling for.”

While May’s exit has been a long time coming, Britain’s departure from the EU has been even more drawn out and property professionals fear Brexit will continue to dominate conversations at the expense of pressing policy issues such as housing.

Jerald Solis, Director of Experience Invest, said, “Theresa May’s position as Prime Minister has been on shaky ground ever since her Brexit deal was first rejected in parliament, so while this is not a completely surprising development, it nonetheless casts further questions over the Government’s ability to manage Brexit.

“I’d like to see housing included as part of the upcoming Tory leadership contest, but the unfortunate reality is that most of this campaign will be dominated by discussions on Brexit. At this critical juncture, our next Prime Minister must demonstrate resolve to not only deliver some kind of solution to Brexit, but also have a broader vision to address the long-term challenges facing the UK, including the housing crisis.”

Nick Leeming, Chairman of Jackson-Stops, added: “Theresa May’s resignation could mark the beginning of the end of the political instability the UK has endured over the last three years. What we need now is a strong leader who will resolve this Brexit conundrum, reunite the party and offer greater stability.

“Provided this does not spark another general election, the UK’s property market should also take some reassurance in May’s statement today. It is positive news for the industry, and we should see those buyers and sellers currently sitting on the fence inspired by this leadership change and finally making a move in the summer months.”

PICTURE CREDIT: DonkeyHotey via Flickr

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