February 2015 Property Market Update: Political turmoil dominates the residential housing market.
Despite the positive spin that many property journalists and professionals are predicting, the property markets in early 2015 are bound to be dominated by one event in less than 100 days time – the General Election.
The General Election – 7th May 2015
There is always uncertainty in the months leading up to a General Election especially in one forecast to be as close run as this. There is a high probability of a coalition government being formed but by which parties remains unclear. However, one thing we can predict is the introduction of a 'property tax' by the newly elected government which will adversely affect the property markets.
Property Taxes
Following the recent changes to Stamp Duty Land Tax (SDLT) late in 2014, combined with the prospect of a new property tax, whether a change in the current Council Tax or a Mansion Tax of sorts, many home owners are considering their options. Sell early to avoid paying additional property related taxes or refinance themselves if they are in a position to do so.
Although the Chancellor believes that 98% of property buyers will be better off under the new SDLT levels, the impact of the higher rates of Stamp Duty above £930,000 is already being felt in this price bracket. Only time will tell whether the changes will increase activity, result in more properties becoming available to buy and improve the chances for first time buyers to get onto the property ladder.
A Positive Economic Outlook
The economic recovery and outlook in many parts of the UK seems inspiring even outside of the south-east and London. With the probability of continued low interest rates, unemployment at its lowest level for decades, and house-builders saying that they have not been busier for decades, the outlook and feel good factor should be an incentive to stimulate the property markets at all price levels.
The London vs County Price Differential
Regardless of the result of the General Election it is forecast that the higher value markets will remain subdued even in London. However, many selling agents are hoping that some London buyers quickly recognize the substantial differential in values by taking advantage of moving out to the commuter hubs where there are good transport links to the Capital.
The Private Rental Market
With many people struggling to find the deposit monies to get onto the property ladder, combined with low interest rates, investors will continue to plough their residual monies into the buy-to-let markets. The target locations will continue to be in all major city areas, University cities especially, and where government investment in infrastructure has been made to help the local economy, create jobs and improve transport links.
The Private rental market is bound to thrive as the cost of transactions, high property values combined with more job opportunities being created makes renting a serious affordable option.
As leading property consultants, Premier Property Search are leading experts in providing independent, professional advice; our mission is finding the best properties in all price ranges and then making sure that our clients buy or rent at the right price. For more information please contact Nigel Sellers on +44 (0) 1962 793100 or email: enquiries@premier-propertysearch.co.uk.
