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Hung Parliament – What now for property?

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Hung Parliament  General Election  Property Market Volatility  Coalition Government 

By - Friday 07 May 2010

After one of the most hotly contested and publicised general elections in decades, the UK economy emerges today with no one at the helm.

Whilst technically at the time of writing, Gordon Brown still reigns at Number 10 as the current Prime Minister, the UK is now in a situation, as suspected, of having a hung Parliament.

The effects have started to appear early on this morning with the pound losing further ground against the US Dollar and the Euro, and the FTSE also dropping as the markets sell out on the news.

Snippets and sound bites are currently emerging that PM Gordon Brown will seek a coalition of some kind, the nature of that could take days to emerge fully, depending on who he is able to cut deals with. If the case arises that he can’t come to a suitable deal that will give him what he needs to continue, then a trip to see the Queen and hand the keys over to Number 10 for use by a minority government, may well be due.

How will all this effect property prices and investment?

In simple terms, hold on to your hats! There are several contributory factors that prevent any kind of stability until a solid government is formed, even under a coalition volatility is to be expected on the count that coalition governments in UK politics are very rare, as a result, the workings of them are not familiar to politicians in general.

It’s a bit like working as a pilot with light aircraft and then turning up for work one day and finding your boss has cut a deal with a major airline and you now have to fly a 747. The principles of flying still apply, but now you have more people to deal with and a lot more dials and buttons to deal with. Chances are as a pilot you will be able to fly your new plane, but the ride is going to be a bumpy one at best!

There will be opportunities in the property market whilst all this goes on of course as we stated prior to the election, just be aware that change will always make any market volatile and the volatility is unlikely to subside until a full Government is formed.

The key thing for property investors and home owners is not to panic! It will calm down. Rushing off to sell your house in fear of further market drops is probably not best advised. These things can and do sort themselves out, and the very nature of the property market being slower to trade in than the stock or currency markets, means that property is one of the better investment sectors to be in and to get into during volatile times.

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*This page is provided for information purposes only and should not be construed as offering advice. IPIN is not licensed to give financial advice and all information provided by IPIN regarding real estate should never be treated as specific advice or regulations. This is standard practice with property investment companies as the purchase of property as an investment is not regulated by the UK or other Financial Services Authorities.

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