The impact of ­Theresa May’s general election on investors

Theresa May has delivered another 'shock political event' for investors to deal with, says Kuflink chief executive Tarlochan Garcha. Picture: Stefan Rousseau/PA Wire
Theresa May has delivered another 'shock political event' for investors to deal with, says Kuflink chief executive Tarlochan Garcha. Picture: Stefan Rousseau/PA Wire
Share this article
8
Have your say

Wasting little time as the nation’s workforce ­re-emerged following the Easter weekend, Prime Minister ­Theresa May gathered the national press to the steps of 10 Downing Street on Tuesday, amidst early speculation that she would be calling a snap general election. And the speculation proved correct.

In the statement that followed, she announced her intention to pursue a vote in the House of Commons to call an early general election well ahead of the usual five-year term regulated by the 2011 Fixed Term Parliaments Act.

Following a truly momentous 2016, 2017 has delivered a further shock political event

Central to her confidence in doing so, as noted in the speech, has been the robust consumer and investor sentiment that has supported increasingly optimistic UK economic growth forecasts from the Bank of England and the IMF. This widespread confidence also extends to the Prime ­Minister herself, who, in research by Kuflink this year, was found to have the confidence of all but a mere 20 per cent of investors who fear her leadership will have a negative impact on their investment strategies in the years ahead.

• READ MORE: Sturgeon: ‘only the SNP can protect Scotland from Tories’

Investors are faced with a series of ­evolving events that will impact financial strategies considerably in the period that lies ahead.

Ranging from the ensuing 24-month Brexit negotiation period triggered by Article 50, to the results of the general election in June, a timely window presents itself to make strategic manoeuvres that enable investors to capitalise on the UK’s dynamic property market.

In what is an increasingly competitive environment, a recent survey found that 37 per cent of investors said they are considering alternative finance and short-term lending options during the two years of Brexit negotiations triggered by Article 50.

With the election campaign now under way, many are wondering how central the UK’s dynamic housing market will feature in an election expected to be consumed by arguments over Brexit. Indeed, prominent figures in the property industry have been quick to assert that real estate must form a critical part of the snap election.

200 Voices: find out more about the people who have shaped Scotland

Furthermore, according to new research, the robust levels of consumer and investor sentiment cited by the Prime Minister should provide great cause for optimism: 2.21 million investors across the United Kingdom have moved into 2017 with a greater risk appetite and are seeking new investment classes, demonstrating the optimism currently gripping the nation’s economy.

With speculation now mounting towards the impact of the surprise election on the UK’s property market, there is an expectation that an abnormally high number of property transactions will be completed in the immediate aftermath of the result. Overall, the impact of the snap ­election is expected to have a minimal effect upon the continued strength of the UK’s property sector, bolstered by unwavering consumer and investor sentiment that has historically remained resilient despite contextual shifts in the political arena.

As the nation approaches ballot day in seven weeks’ time, 2.7 million investors were found to have been considering property investment in 2017 despite any remaining concerns around Brexit.

Following a truly momentous 2016 full of surprises, 2017 has swiftly ­delivered a further shock political event that is set to affect the way in which we as a nation are governed, and by extension, the way in which we conduct business.

Over the next few years, we can inevitably expect further political twists, and investors will need to be aware of the impact those will have on their investment strategy.

However, if the past 12 months and the market’s ­reaction to the snap election are anything to go by, there will be no shortage of opportunities available to the nation’s investors, if managed in a timely and strategic manner.

Tarlochan Garcha is chief executive of ­peer-to-peer lender Kuflink

Click here to ‘Like’ The Scotsman Business on Facebook