Multidisciplinary property services company, Romans analyse the election results in relation to the UK property market, identifying opportunities and risks for those wishing to buy, sell and rent.
In the recent UK elections, the Conservatives won a 331 seat majority vote meaning that they will implement a number of items set out in their manifesto relating to the current UK property market. The Romans Group is a multidisciplinary property services company that analysed the conservative manifesto in relation to the South East of England as well as looking at the UK as a whole, with the aim of identifying potential opportunities and risks for those wishing to buy, sell or rent.
It’s no secret that it has become extremely challenging for first time buyers to enter the UK property market. First time buyers create the stability that people aspire towards and the conservatives have acknowledged this in their manifesto. From Autumn 2015, the new Help to Buy ISA will be introduced which will assist those wishing to get onto the property ladder to save for a deposit. For every £200 a would-be buyer saves, the government will add £50, up to the value of £3k. Additionally, David Cameron has announced that the Thatcherite Right to Buy scheme will be extended, offering 1.3m Housing Association tenants the opportunity to purchase their property at a significant discount. Right to Buy was initially introduced in 1980 and between then and 1996, tenants at discounted rates bought 2.2m homes. Peter Fuller, Lettings
Managing Director at Romans commented that: “Demand from buyers and tenants is still greater than supply; so it’s important that all homes bought through the Right to Buy scheme are replaced. This will happen as long as local authorities are given the power from the Government to reinvest money into more house building to satisfy the demand.”
Councils will also be required to sell about 5% of their remaining council stock which is expected to release £4.5bn per year. This revenue will then be used to build affordable new property as part of a £1bn brownfield regeneration fund which aims to produce 400k new houses over 5 years, as well as fund the proposed discounts to tenants wishing to utlise the Right to Buy scheme. Peter Coles,
Romans Group Managing Director commented that: “The Government is giving the green light to all stakeholders to address the housing shortage, so it’s now down to developers, investors and local authorities alike to play their part in ensuring this happens.”
Vincent Courtney, Sales Managing Directed, added that: “Home-building companies’ shares have soared. Five more years of stability and Conservative policies will give the sector the confidence to grow their operations and increase the housing supply in order to satisfy the demand.”
In the South East of England, a lot of new home developments are planned and with interest rates remaining at record breaking lows, it is likely that even the most cautious of investors will have the confidence to grow their portfolios. Following the 2010 general election, there was a 24.7% increase in transactions nationally in the following 3 months, compared to the subsequent 3 months. It is likely that the increased stability that a Conservative majority brings for the next 5 years will result in an even bigger surge this time around.
Peter Fuller commented that: “Understandably many people were uncertain and cautious in the lead up to the election but with stability assured, buyers, sellers, landlords and tenants will now have more confidence in the property market, supporting them in their next move.”
In the region covered by Romans which includes Reading, Wokingham, Maidenhead, Basingstoke, Farnham, Farnborough and Camberley, there was a higher than average 26.5% increase in transactions following the 2010 election, and for homes worth £1m or more, this uplift amounted to 48%.
These figures would suggest that increased activity is likely over the next few months and beyond, and it would seem that whether you plan to buy, sell or rent, now is the time to act.