Whilst 2015 has so far been a good news story for the UK property market, the run up to May’s general election seemed to have a negative impact on real estate recruitment activity. At Foundation Recruitment we noted a significant reduction in new mandates throughout April. The Easter period was clearly a contributing factor but the battle for number 10 provided an added, unwelcomed distraction across the UK property market.
For many, there is a feeling that we can now return to business as usual after the pre election lull. Our General Practice team at Foundation Recruitment have certainly noticed an increase in transactional led mandates since the unexpected Conservative majority was confirmed on May 8th but what impact is the result expected to have on the UK property market?
In the short term, many expect the outcome to be positive; something that was reflected on the stock market even before the final constituencies declared their results. The FTSE 100 leaped by 133.81 points to 7,020.76 and UK REIT’s jumped by almost 5% on the morning of 8th May. Strong employment, low inflation, low interest rates and high levels of inward investment all bode well for the property sector.
However, an elephant in the room remains and many of the UK’s property experts are nervous about the prospect of the UK voting to exit the EU in the planned referendum due to take place in 2017. The property industry has been almost universal in its condemnation of an EU exit, fearing that it will hit businesses at a time when the UK needs to appear stable to foreign companies. Over the last 12 months, Foundation Recruitment have worked with a number of London based property investment specialists who act on behalf of private clients from a plethora of overseas territories including China, Russia and the Middle East. As it stands, the UK property market is one of the most attractive investment hubs for overseas investors. Britain’s exit from the EU could have serious ramifications and a negative impact on the attractiveness of the UK market internationally. A view that is shared by Mat Oakley (head of European Commercial Research at Savills) who recently told Property Week “An EU referendum, if it were to lead to the UK leaving the EU, would have a damaging effect on London’s attractiveness to US and Asian businesses that are looking for a European HQ”.
However, many expect David Cameron to lobby hard for Britain to remain in the EU and to many it does seem unlikely that Britain would make the disastrous move of extracting itself from Europe. Therefore, until then it is widely felt that the election result will have a positive impact and restore overseas investor confidence in UK real estate assets. Ed Mead (Executive Director at Douglas & Gordon) feels that the result will lead to a surge in capital values over the next five years, particularly in the residential market.
At Foundation Recruitment, we are feeling extremely positive about the UK property market for the foreseeable future. We fully expect a higher volume of roles to come into the London market for the remainder of this year. The regional outlook is also positive – we have recently been instructed on a wide range of different mandates across the North West, Yorkshire and Scottish markets. If you are an active job seeker and would like to discuss your next career move, please do not hesitate to contact one of our specialist consultants to find out how we can add value to your search for that new role.