"Lurching" - the new political landscape?

09 June 2017

I confess to being disappointed by the outcome of the general election result. Not as a statement of any personal political bias, but more as reflection on an outcome which can only feed further near- term economic and political instability.

In recent times we have had successive leaders take what some might call a rather cavalier approach to asking the electorate to vote on crucial issues. Whether the rationale behind these decisions has been simple arrogance or a genuine desire to improve the political landscape, evidence suggests that there have been a lot of misguided assumptions as to the likely outcome; consequently leaving the UK appearing weaker than it would have been if the election had never happened.  

It is difficult to pick apart the disparate motivations of the UK electorate - that is best left to those more qualified to assess - though even to the lay person it seems that we are “lurching” from one political mishap to another.

When watching the results coming through late on Thursday night, I conjured an image of how the UK may appear as a smoking car, gathering speed, skidding and then lurching from side to side as the driver-fought to regain stability. Interestingly, my lose understanding is that in such a scenario a driver is advised to take their hands off the wheel before making any corrections; I am not sure that is possible in politics and perhaps therein lies the problem.

So what does this all mean for the UK Property Market? The truth of course is that no one really knows. Our best guess is that despite attempts by the politicians to create maximum uncertainty, those  assets which have strong underlying fundamentals (quality, location, functionality) will continue to be an attractive investment, particularly when interest rates seem likely to remain low. In an era where income is king, property still looks relatively attractively priced compared with the other main asset classes, regardless of political events.

Returning to political “lurching”, I do hope our politicians can set-aside party politics (and their own egos) and start behaving more as the custodians of our democracy and national interests; sadly I suspect that “hope” will be the operative word!!   

Matthew McDonald

Partner, KFIM

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