Property buyers holding off until election

In a sign of the times estate agents have warned economists and analysts that homebuyers appear to be holding off in the run-up to the general election. This warning from the property sector would seem to confirm recent surveys which show that house prices appear to have stagnated after a drop in activity within the sector.

In reality this particular type of strategy by property buyers is understandable and has occurred many times in the past. As we approach the general election we have two very different economic policies before us with the Labour Party continuing its spend, spend, spend policy on public sector investment and the Conservative Party looking to rein in public sector spending. There is also the potential for significant tax increases, which are inevitable, but the size of tax increases could differ significantly between the two main parties.

There is also the risk of inflation which is now in the back of the minds of many people with the UK government of the day appearing to favour a strengthening of the economy in the short term over tackling the problem of inflation. Whether the identity of the next government will have a major impact upon the property sector in the short to medium term remains to be seen but for whatever reason investors are holding off for the time being.