With the rising concerns over the likelihood of a UK hung parliament after the upcoming general election, we thought we’d take a look at the effects this could have on property investment, both at home and abroad.
Just as at any time when there is instability (prior to budget announcements and the like) the press have a tendency to over hype things and encourage far more “opinion” than is arguably necessary. This, with the invention of late of social media and interaction within the online world in which most of us live these days, tends to create over analysis for the sake of it. For example, just trying to find out what is going on with house prices at any given time can be a nightmare. There are so many reports that contradict each other it really is a bit confusing as to what can or should be believed.
As a result on a day to day level we tend to see huge volatility in the market place because we are told one day that prices are up, and next they are down. Basically no constants at all, resulting in uncertainty, false variables and (whilst it might not seem like it,) stagnation.
For those invested or considering investing outside the UK, some countries are more familiar with hung parliaments, or at least coalitions resulting in more stable economies. The countries that are used to these political states are more familiar with the results of their combined government actions. The media at large subsequently find it difficult to add any elastic to the yo-yo that is investment opinion and basically media spin. This in its own right, whilst creating a more stable market place, the reduction in volatility can have a negative effect insofar as removing vast swings in the markets (whether that be the stock markets or housing).
What to do?
This depends on how brave you dare to be, and how big your risk hat is. Volatility by nature has both huge risk and reward attached. In the property market though, given the slow moving nature in buying and selling that it has, the best suggestion for outright ownership in the UK is to keep an eye out for the dips. If you manage to acquire during one of the lows, award yourself a pat on the back. Even if you don’t get it quite right though, all is not lost. Once the political maelstrom subsides, stability and growth will return to the industry. If it is stability right now that you are looking for, consider a Secure Exit Strategy investment
whilst you ride out the storm.
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- Tuesday 16 March 2010