Conservative election victory sparks sharp recovery in housebuilder stocks
The uncertainty surrounding Brexit and the country’s future has long been blamed as a source of the property market’s recent struggles.
However a sizeable Conservative majority in the general election has already resulted in a sharp rise in housebuilder stocks.
FTSE 100 firm Taylor Wimpey’s share price rose by 11.4 per cent in early morning trading.
While fellow British housebuilder Redrow has also surged by 9.5 per cent.
Barratt Developments and Persimmon have also made gains of 10.5 per cent and 12.5 per cent respectively to cap off a strong morning for the UK property developers.
The stocks have been buoyed by the certainty that the election result brings and house prices could see a similarly positive outcome.
Transactions to get moving imminently
No sector has been weighed down more than the house building and construction sector by Brexit uncertainty, according to Nick Burchett, co-fund manager at Cavendish Asset Management.
“Less of the oven ready, and more of the shovel ready for housebuilders this morning following the Tory victory,” he says.
“Tax incentives, such as the 30 per cent discount for first time buyers, is likely to get transactions moving imminently and demand for construction labour will also increase.”
Property market adrenaline shot
The election result will release “a lot of pent-up demand”, says Andrew Montlake, managing director of Coreco.
“This decisive General Election result could deliver a massive adrenaline shot into the UK property market,” he says.
“Expect a sharp uplift in transaction levels starting early in 2020, as buyers and sellers who have played it safe put their plans into motion.
Despite the result meaning that Brexit will go ahead, the certainty around the future means this could be “the beginning of a long Brexit bull run”, he adds.
‘Greater home ownership’
Today’s result will “provide some reassurance to the property market” according to Jackson-Stops chairman, Nick Leeming.
“Throughout the Conservative party’s campaign they pledged their support for greater home ownership and so now is the time for them to form a Government that will deliver on this,” Leeming says.
He calls on the government to reduce stamp duty across all pay-brackets for UK residents to improve the market’s fluidity and to help first-time buyers, young families and those looking to downsize.