How would a hung parliament affect the UK housing market?
As we stare head-on towards a hung parliament in the UK come Friday morning there are serious concerns about the potential impact on the UK housing market. When you consider that over 50% of the UK employment market is in some way connected to state operations and the public-sector, there is the potential for significant job cuts in the short to medium term which would impact upon general economic activity and demand for houses.
When you also take into account the fact the government will need to increase taxes, reduce overall public-sector spending and push through as many efficiency savings as possible there may be problems for the UK economy as a whole and the housing market in particular. There is also the potential to talk ourselves into a difficult period for the housing market simply by negative talk. The more negative talk there is around the UK housing market the less chance buyers will step forward, hoping prices will fall in the future, with the potential for more homes to go on sale thereby reducing upwards pricing pressure.
It is difficult to estimate the actual impact that a hung parliament could have on the UK economy and the UK property market with great confidence, but the very fact there will be reduced confidence in the UK in the event of a hung parliament is a concern in itself.
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