How has the political situation affected the property market?

 
How has the political situation affected the property market?

When it comes to factors that can have an effect on the property market, there are a number of things that we would think of immediately, such as the economy, consumer sentiment and the demand for homes. But do we ever think of the political situation itself as a strong influence on the market?

The governmental situation can have a substantial impact on how the property sector performs, though, as we can see in the predictions ahead of next year's general election. It is believed that the threat of Labour's mansion tax proposals will mean uncertainty in the months ahead of the big vote, as those with money to spend wait to see what they will be taxed on million-pound homes.

With just under a year still to go until the general election, then, how has the current coalition government impacted the property market? We take a look at some of the policies and how they have changed the face of property in the UK.

At the most basic level - property prices - we can see that the final sale values for homes has risen considerably since the election in May 2010. GoCompare's latest report has shown that in the four years since the formation of the current government, these have increased in London by some £103,323, on average, from £331,711 in 2010, to £435,034 this year.

For Londoners who bought just ahead of the general election, this means that property prices have increased to such a level that they've essentially had an additional salary of £25,000 pouring into their savings.

Next to London, the south-east was the best performing region, although the 16.8 per cent rise was still four times lower than the increases that were experienced in the capital. 

So what policies have had an impact on rising house prices? The most prominent has to be the oft-debated Help to Buy scheme, which was introduced by the government in April of 2013, helping first-time buyers (and later anyone) get onto the ladder with no more than a five per cent deposit. 

This has helped to swell the number of buyers across the nation, and by the end of 2013, there were nearly ten prospective buyers chasing every single home that came to market nationwide. 

Other governmental action can also have an impact, even if it is not a policy directly linked to property. An example of this is the way the coalition brought in austerity measures that helped in part to reverse the economical situation across the nation.

Ever since coming to power, cuts have been a major part of the government's agenda, criticised by many, but by the second half of last year, the economy was back in a period of growth, and it is expected to expand by a further 2.6 per cent in 2014.

There can be little doubt that this financial positivity is a plus point for the property sector as well, and the stability has allowed property prices to reach their peak again after they troughed in 2009 following the bursting of the previous bubble in 2008.

Looking forward, uncertainty will be a definite factor for the property market in 2015 in the run up to the election, but one thing's for sure - the impact of government can never be overlooked.