Property got what it craved this morning, a Tory government. But once the champagne bottles are emptied, fears will creep back. Could the UK really quit the EU and what would that mean for inward investment?
Last week, 70% of you told our REview poll that you hoped for a Conservative-led administration. I doubt many believed it would be the majority that now looks so likely. But you also said that while Labour policies to introduce rent controls and a mansion tax were chief among your concerns, so was David Cameron’s promise to hold an EU referendum by 2017.
For these respondents and others leaving the EU would make the UK a less attractive place to invest. And privately, many of the most senior figures in property (including those with investors and funders in the US) warn that two years of uncertainty about our continuing membership of the European club could be devastating.
This morning sterling and the FTSE showed their support for the election outcome and indeed for political certainty. Will that market cheer continue throughout what will be a divisive, unedifying referendum campaign? The longer it goes on the more damaging it will be and, make no mistake, property – and London’s position as the world city – will suffer in the interim too.
The best outcome is a swift resolution. A referendum should be held as soon as is practically possible to minimise disruption and damage. And then, given the SNP’s surge, we can address what could well be a second referendum of the parliament – a return to the future of the union.
