David Cameron’s return to 10 Downing Street in the recent UK general election may look like a vote of confidence in his leadership of the Government. But Cameron’s former coalition partners, the Liberal Democrats, are in disarray. So the former coalition’s Parliamentary majority has effectively been wiped out; Cameron’s very slim majority means he may end up doing deals on a case by case basis with smaller parties. That could bring with it fresh instability for property markets.
In this paper we look at the election outcome and the key risk ahead. Attention is now turning to a potential referendum on membership of the EU. And a profound change in sentiment in Scotland means that the property market outlook there also remains uncertain. Fortunately, the UK economic outlook looks reasonably strong, which we suspect will be more influential on property market prospects than any short term political volatility.