There has, as always, been conflicting remarks from property commentators about how the residential housing market has been performing and what the future holds. Doom and gloom in one paper and another stating the future is looking buoyant.
What seems to be accepted is the recent general election result is disastrous for the property market in the short term. It is highly likely that the housing market will drop down the policy agenda in favour of Brexit and public policy for social care/NHS and education. A further distraction is the mounting pressure on the Government to ease austerity restricting pay increases to 1% for the police, nurses, doctors and other public sector workers.
Unfortunate incidents such as Grenfell Tower and recent terrorist attacks too further demote the housing market in the list of priorities.
Our core business whether it is corporate rentals or private client acquisitions has always followed the London trend. What happens to the property market in the Capital effects the provinces and commuter areas into the City.
The substantial cost of selling and moving continues to be the single most significant reason for the slowdown in transactions (estimated to be -7% nationally April ’17 according to Land Registry methodology) and lack of activity generally.
The Bank of England has also reported a sharp fall in approvals for house purchase and re-mortgage loans (nearly 65,000 to 40,500 April ’17).
The change and increase in Stamp Duty Land Tax (SDLT) has damaged the middle to top end of the market and any change in rates is unlikely. Some agents say that buyers will come to terms with the new rates and budget accordingly however, we are yet to see any evidence of this and buyers continue to protest at these costs.
Taking the long term view, looking ahead...
We have to recover (and we believe we will), from the recent stagnant market; down to the deterioration in housing affordability brought about by the sustained rise in prices between 2014 and 2016.
Many people continually refer to the shortage of properties to rent or buy, this drives demand and supply. This year more than any other there has, in our experience been a good, not exceptional, but good supply of properties to rent and buy for our clients. We have transacted on more ‘off market’ properties than in previous years and this continues to be a major attraction as to why clients use our professional service.
Whether you are renting, buying, downsizing or an investor, our advice is to take a long-term view and put anything you read regarding the reported ups-and-downs into perspective. If there is a shortage of properties, the demand for property will continue and the challenge is to find the best properties in the best locations and ensure clients only pay the best prices for the property.
Regardless of negative comment, it’s an exciting time to be renting or buying and we would professionally advise everyone to take a long-term view. Keeping your money in property continues to be a safe and sound investment.