Brokers fear hung parliament
The latest polls place the Conservatives and Labour neck and neck followed by UKIP and the Liberal Democrats, making the prospect of no party winning today’s general election by a clear majority a real possibility.
David Hollingworth, associate director of communications at London & Country Mortgages, said: “Prolonged uncertainty around the makeup of government and the potential threat of another election could affect the markets.
“That would result in weaker sterling which in turn would lead to a rise in inflation which raises the question of rates rising sooner.
“That’s a lot of ifs but it could ultimately edge mortgage rates up as the impact is fed through to the cost of funding.”
Brokers are concerned about a coalition government other than the Tory-Liberal match getting into power from next week.
Jonathan Burridge, an independent mortgage broker based in East London, said: “The worst scenario would be a coalition that failed to achieve anything and saw us hitting the ballot box again before the year is out.”
Alan Lakey, director of critical illness advisers CIExpert, went further. He said: “Effectively a coalition is a committee where everybody’s viewpoint is assuaged and nothing worthwhile or radical ever results.”
Hertfordshire-based Lakey said he is considering voting UKIP at the polls later today.
Meanwhile Brian Melling, proprietor of Mortgage 2 Move in Derby, is voting Conservative. He said: “Five years ago as a mortgage broker I was twiddling my thumbs as the banks didn’t have the money to lend.
“Basically there was no business to be had. The government we had wasn’t doing us any favours, but now I’m rushed off my feet.
“As a business I will be voting Conservative – businesses are backing the Conservative. Labour says it supports small businessmen but it’s the big businesses that rule the economy.”
Burridge and Melling praised the way the Conservative-Liberal Democrat coalition has handled the economic recovery, indicating that they would be happy if the same government returns to office.
Burridge said: “As coalitions go, the Conservative/Lib-Dem coalition will be a hard act to follow as they appear to have got on with it and worked well together.”
But not all brokers regard the Tories as the party to back. Richard Hanlon, principal at Mortgage Planners in Dundee, is supporting Labour to “favour the working man” claiming “the lower paid are taxed too much and the higher paid are taxed too little”.
He said: “The Lib Dems were soft touches with the Conservatives and therefore the worst election result would be the status quo remaining.
“I don’t want to see the Conservatives go into coalition with the Lib Dems and trample over them all over again.”
Hanlon said he backed Labour rather the Scottish National Party, condemning the latter who he said “don’t do a good job of running the city”. He added: “They are not good at running the budgets.”
The Conservatives have come under scrutiny from some brokers for reintroducing right to buy – originally a Thatcherite policy which would allow 1.3 million housing association tenants to buy their own homes.
Hanlon said: “Morally it’s outrageous as there’s not enough social housing to meet demand.”
Burridge said: “I don’t think we should be selling off housing association properties. There is such a shortage of homes and rental costs are rising. Also retaining the stock provides a piggybank for the future.”
Burridge backed policies which encourage housebuilding and longer-term rental agreements but he said Labour’s plan to remove stamp duty on homes worth less than £300,000 failed to solve the underlying issue of spiralling house prices.