A new year is upon us and brings with it a new government. Political changes always cause interest in the markets, particularly property.
It is prudent, then, to look at where the market has been since the 2017 election, which led eventually to a hung parliament and potential uncertainty as to the future, and to see where it will go, now that the country has a majority government.
I was interested to find out if there had been a slowdown in the number of properties coming onto the market since the 2017 election.
Tim Pennington, chartered surveyor, auctioneer and RICS registered valuer from Northallerton Estate Agency, felt there had been. “It’s difficult to say why,” he said. “I think there have been a lot of issues, including dips in the market, blamed on Brexit, but there has been a huge lack of capital too. A few years ago, people used to be a lot more confident in selling their house.”
Gordon Carver, director at Nick and Gordon Carver Residential, thinks that the increase in Conservative MPs in the region following the election in December could help to buoy the market. He said: “We are viewing the election as a very positive result, as traditional Labour strongholds have turned to Conservative. To retain this in the future, they will need to invest in these areas, which has increased our confidence for the future.”
House prices in the North East have been “fairly static” over the past few years, but there has been a significant increase in the number of new builds being purchased, due to the investment in government schemes. As part of its election manifesto, the new government plans to encourage providers to offer long-term fixed rate mortgages and plans to extend the Help to Buy scheme to continue into 2023.
John Coleman, county house and farm agency director at GSC Grays, backs these pledges, however, he warns that more needs to be done. He said: “Both of these commitments are expected to make it easier for first time buyers to enter the market particularly in the new build sector. Existing stock is unlikely to be hugely impacted. Measures to address the increasing number of fall throughs is more urgently required and it will be interesting to see the results of the trial on reservation agreements being carried out by the government in the first quarter of 2020.”
It stands to reason that now we have political stability, we should see a positive impact on the housing market, as confidence in the economy grows. The estate agents I spoke to were of the same mind.
Tim Pennington said: “If houses are at the right price in the right areas, they will sell very quickly. This is something we’re already experiencing, and will no doubt increase with time. You would expect with a Tory government that you would see an increase in the amount of mobility, although this, of course, also depends on additional gains in personal wealth.”
Gordon Carver said: “We expect positive rate of sales to improve in the next 12 months. Now the government can make decisions, things can move forward. Many people have deferred making investment decisions until they knew where they stood with the economy, so we expect more money will be invested into property now this is resolved.”
John Coleman said: “The speed of a sale is more to do with preparation, the service of the estate agent and the complexity of any chain, rather than anything political. However, recently the trend has seen times increasing. I do think, though, that confidence and political stability will eventually be reflected in sales times falling, which is positive for all parties.”
By Martin Williamson, Head of Residential Property at Latimer Hinks Solicitors
Please note: This article is intended as guidance only. No responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by Latimer Hinks. In addition, no responsibility for loss occasioned/costs arising as a result of any act/failure to act on the basis of this article can be accepted by the firm.