The results of the UK election came as a surprise to most of us. The prospect of a large Conservative parliamentary majority was crushed the moment the broadcaster’s exit polls were made public as voting closed on the night of the election. The result – a hung parliament, which has forced Theresa May to partner up with the little-known DUP (Democratic Unionist Party) to form a new Government.
The reaction of the financial markets was noticeable and immediate but not severe (apart from a drop in the share price of some UK builders). The fall in the pound was modest when compared to the sharp drop it suffered after the Brexit referendum result in June last year.
This uncertainty and lack of direction however, is expected to impact the demand for property (acquisitions) in the short term. Whilst the rental market should remain fairly robust, some investors will adopt a wait and see approach and others will be on the lookout for buying opportunities. ‘Need’ driven purchases – mainly by UK residents, will be less affected across most price segments also due to the strength of London’s long term fundamentals.
