Sterling has already risen more in one day against the Euro than it has done since 2009, bond markets are up and I expect to see a continued strengthening in the property market.
Over the last year there has been a general upswing in confidence; lenders have loosened their purse strings a little and hopefully, having a majority government, this will now continue. A hung parliament and the associated uncertainty as the politicians ‘horse traded’ over terms would have been a drag on confidence.
Having a Conservative government means that everybody with a property at the higher end of the market will also be relieved that the prospect of a mansion tax will recede. Overseas money will also see a Conservative Government as more user friendly so we are likely to see that underpin the top end of the property market.
There has already been a big upswing in the number of developers entering the market in the last six months and this should now continue. These developers have covered a range of people from first time developers, to those with a construction background who want to run their own projects, or even developers who were in the market a few years ago, dropped out during the recession and are returning now funding is less tight.
Funding has become more available and more diverse as we have seen a large number of non-bank lenders enter the developer finance sector. Lenders have been attracted to the market by the higher returns and relatively short timescales, and with no shortage of developers looking for funding this market should continue to grow. A change in government, and certainly a hung parliament, would potentially have jeopardised this as uncertainty set in and people paused for breath to see what the attitudes and policies of the new government would be.
Without wanting to stereotype matters I think we can say that most business owners will be more right leaning in their outlook, so a majority Conservative Government should be good for business confidence and that will hopefully lead to more investment. Growth and investment are likely to require funding of some form and that should mean more opportunities for commercial brokers in the commercial mortgage market and the asset and cash flow finance sectors.
There is one black cloud on the horizon for the business community and in a hark back to the last majority Tory Government it is Europe. For all the issues and problems that are raised by opponents of the EU it would still be a huge economic gamble to withdraw from the single market. The Government has promised a referendum on our membership by 2017 and the fear is that the economic factors will be outweighed by political and personal prejudices, so there will still be plenty to keep us interested in the coming months and years!
By Robert Collins, Director of Commercial Finance, Brightstar
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