A hung parliament would be 'disastrous' for housing market, warns lender

A hung parliament would be nothing short of disastrous for the UK housing and short-term lending markets, a lender has warned.

On Wednesday, YouGov polls estimated that the Conservative party would win 302 seats in the upcoming election, well shy of the 326 needed for a majority in the House of Commons.

With the possibility of a hung parliament looming on the horizon – whether it be the Tories and another party or a Labour, Liberal Democrats and Scottish National Party (SNP) coalition – the UK’s own government could now be divided as it enters crucial talks with the European Union.

“I do fear a hung parliament as I do not think Brexit negotiations can successfully be conducted by a consortium, all of whom have different agendas,” admitted Mike Strange, managing director of Funding 365.

“This weakness will certainly spook investors, which will have a material negative impact on the UK economy and housing market, which is already weak.”

Earlier this month, a survey of property and asset finance intermediaries by United Trust Bank (UTB) found that 41% identified uncertainty over the impact of Britain’s departure from the EU as an obstacle to their business goals for the year.

Just yesterday, a similar UTB poll found that 71% of brokers hope Theresa May’s government would be steering the UK through Brexit.

“Our impending exit from the EU seems to have taken a back seat in many of the recent political debates, however, it’s crucial we have a stable government with a strong mandate to take us forward,” insisted Ashley Ilsen, head of lending at Regentsmead.

“A hung parliament would be nothing short of disastrous for the housing market and the short-term lending world.

“The last thing we need is more uncertainty.”

“We have had conversations with clients who are stalling pending the results on Friday morning and a hung parliament will only … lengthen the [delay] in our opinion,” added Martin Stewart, director of London Money Commercial.

Michael Dean, principal at Avamore, believed today’s election could be just the start of yet another wave of political upheaval.

“A minority government propped up by the SNP is a recipe for disaster and it would not be unreasonable to expect another election in the autumn if we do end up with a hung parliament, as it will be difficult [to pass] any flagship legislation.”

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