17 Mar What will the UK housing market look like after the election?
There’s talk of little else at the moment – the election, of course. It’s set to be hotly contested, with few pundits feeling confident enough to predict the outcome. This is, in part, because it’s the first election since 1974 to be held under a coalition government.
But what does the election mean for the UK housing market?
It’s been a positive year so far. House prices are still rising, an average of 8.3% compared to the three months up to last February in 2014, according to Halifax. London and the South East have seen the biggest rises.
There’s a general feeling of positivity among consumers. The latest edition of PwC UK’s economic outlook projects a continued UK recovery in 2015 and 2016, despite continued volatility in the global economy.
The problem with an election is that it creates uncertainty in the market. Neither buyers nor sellers are sure about what will happen, and therefore decide to hang back in a “wait-and-see” approach.
They are waiting to see who will win, because every party has a host of new policies relating to the property market. There’s Ed Milliband and his £2m “mansion tax”. A new Government may either hang on to, or scrap policies such as the Help to Buy scheme, responsible for helping more than 70,000 first time buyers onto the property ladder and a real boost to the construction industry. How many new houses will be built, and where, will also be a key factor affecting the UK housing market in the next few years.
There’s also a lot of talk about pension reforms taking force this April, and whether this will encourage a boom in investment into buy-to-let property by older people.
Interest rates, meanwhile, which govern how much we pay on our mortgages, are set to stay low for the rest of the year as inflation hits its lowest level in two decades.
Our conclusion: the UK housing market will slow… and then pick up
We think that transactions will slow in the run up to the election, and then pick up pace once the new Government has been announced. Halifax said that UK house prices fell by 0.3% in the three months up to February, and Nationwide’s latest survey echoed this with a drop of 0.1%. However, both predict an annual growth rate of 8% or more. There continues to be an outstrip of demand versus supply, which most commentators think will keep the UK housing market strong for at least the next decade.
We think that now is a great time to buy, because come late May we expect there to be an influx of property on the market and continuing for the six months following the election. Not only will the election be done and dusted, but it will be at a time when the housing market is at its most buoyant – spring and summer.
Talk to us if you want to know more about how the election will affect your decision to buy or to sell in Chalfont St Peter, Chalfont St Giles, Gerrards Cross, Rickmansworth and Beaconsfield, call us on 01494 873663 or visit www.a-place.co.uk.