As we write this update we are just days away from the General Election (June 8th) and the media is naturally full of “noise” about the people, the policies and the predictions that are key to this important event.
The polls currently show a majority for the incumbent Government and Prime Minister but with “clear blue water” between the main parties in terms of their manifestos and policies anything could happen – just look at the Brexit referendum outcome and the election of Donald Trump.
All of the main parties are talking up the need for more housebuilding, primarily in affordable sectors but there is little in the way of clear policy to support this and, without planning reform and a loosening of land restrictions such as the “Green Belt” some of the numbers being banded about look like wish lists rather than a likely reality. Of course with estimates of around 30% plus of those working in the building industry being migrant workers, a “Hard Brexit” and greater immigration controls could potentially undermine these ambitions as well.
So what of the current market? Well it is fair to say that it is currently holding up but not much more. There is a slightly greater degree of caution being displayed due to the uncertainty of the result on June 8th but this is likely to dissipate immediately afterwards and we expect a return to a more stable marketplace thereafter.
A lack of urgency caused by houses prices that are not rising nor collapsing is seeing activity levels down on a year ago. Prices have generally adjusted downwards a little and many properties are still coming to the market at inflated values creating a growing amount of stock. Those who are pricing their properties attractively are capturing considerable interest which reflects good underlying demand and often receive several competitive offers, resulting in excellent values being achieved.
The lettings market is similar with competitively priced stock still attracting good interest. There are signs of some landlords choosing to leave the market due to increases in taxation and a reduced ability to defray costs but the majority see being a landlord as a long term investment and look set to run the course.
Inflation is showing signs of increasing and growth in the economy is slowing. These factors are almost counter-balancing each other and interest rates are therefore likely to remain very low for the coming months at least. There are plenty of excellent fixed rate mortgage schemes available to be taken advantage of.
Now is the time of year to be marketing and agreeing sales if moving to secure school catchment areas for September is an important factor.
To conclude, whoever we all vote for on June 8th we will end up with the Government and we don’t see anything that will dramatically alter the housing market one way or another as a result.
Chris Harper and Darren Murphy