Election surprise, but hopefully no surprises in the property market
Fri 15 May 2015
The results of the evening of 7th May 2015 were seen to some as a shock and in some ways came out of the blue, catching out not just the public but seasoned political commentators and politicians alike.
Whatever your own political views and whether you are happy with the election results or not, one thing is for certain, stable governments provide stable housing markets. I believe, in the short term, the election outcome will result in a surge in market interest as the pre election jitters over potential political instability have been settled.
We, at Andersons, have seen a significant increase in activity since the election and more positivity from both buyers and sellers. Having said that, this year has been very encouraging with high numbers of motivated buyers actively looking for their next home or investment, resulting in greater levels of competition with most properties reaching the asking price and in many instances achieving in excess.
My advice to those who have been thinking about selling, but awaiting political certainty, is to make a move now! The market and property prices have been boosted by a lack of houses for sale, but this is looking likely to change with more properties coming on to the market, creating more competition for vendors. So if you’re thinking of selling I would take advantage now whilst conditions are good!
When writing this column I found my opening comments easier to pen; discussing how the market has performed over a short period of time came easy. However, looking into my ‘crystal ball’ to predict how the property market will perform in future is a much more difficult task and I can only provide my personal opinion, possibly mixed in with a little of the inevitable Estate Agent optimism.
I believe we are currently in a mini property bubble, with vendors riding the wave of high demand and low supply, but this will not last forever. In the longer term I feel property prices will continue to increase but at a more measured rate and I can see that with the removal of the uncertainty that was hanging over the last year of the coalition, stability should return to the property market. This stability can only be provided in the form of more properties coming on to the market. The new government wants builders, investors and local councils to increase the supply of both new builds and repurposed empty homes (it would be great to see if the Tories did honour their annual pledge of 200,000 new homes and utilise brownfield sites for development). Current home owners should benefit from this stability, with UK interest rates unchanged at their historic low and with no immediate increase likely, mortgage approval rates increasing, changes in pension freedom and a raft of ‘Help to Buy’ type schemes available there is no shortage of active and eager buyers out there.
The result of the election may not be universally popular but one thing is for certain buyers, sellers and the property industry can again plan for the future with confidence.