What The Election Results Mean For The Property Market
And How They Could Affect Your Property
In this 3-minute read, we explain what Boris Johnson’s landslide victory at last weeks general election could mean for the property market.
The election on Thursday 12th December 2019 saw the Conservatives win 43.6% of the vote, the highest share for any party since 1979. The value of the pound immediately soared in response to the news; and on Friday morning the pound had already surged to a three-and-a-half-year high against the Euro and its highest rate against the US dollar since last May.
The positive reaction our economy has had to the results also means that some stability should return to the property market; and that we will all enter 2020 with somewhat of a spring in our step.
After his election win, Prime Minister Boris Johnson renewed his vow to take Britain out of the EU on January 31; signifying a highly potential end to the uncertainty surrounding Brexit. The closure this brings suggests that property prices are likely to grow next year, as those who have been holding off re-enter the market and a huge amount of pent-up demand is unleashed.
Whilst the South East has remained one of the least affected areas since the initial vote on Brexit in 2016, on the whole, we’re confident that 2020 will see a more buoyant market than we’ve experienced in the last 3 years.
Property expert, Andrew Montlake, Managing Director of mortgage broker Coreco said to inews.co.uk, “Expect a sharp uplift in transaction levels starting early in 2020, as buyers and sellers who have played it safe put their plans into motion,“
“Although a lot of the hard work around Brexit has yet to be done, there is now a political stability that will give a lot of people the confidence to get on with their lives,“ Mr Montlake said. And we completely agree.
Whilst the long-term impact of Brexit remains to be seen, the Conservative win has definitely had a positive short-term effect, which we expect to continue throughout 2020.
In summary, if you’re house-hunting you should see a surge in available properties over the course of the year; and for homeowners, you may experience an increase in the value of your home.
Read on to find out what The Conservatives pledged for the property market in their manifesto.
The Conservatives Manifesto: Property
Help For First Time Buyers
• pledged to build more homes for local people by allowing councils to use developer contributions to fund a 1/3 price discount. Unlike the failed Starter Homes policy, this discount would apply in perpetuity, which takes away one of the key obstacles to valuing and mortgaging these homes.
• pledged to encourage long-term fixed rate mortgages with low deposits.
• pledged to build 1 million homes by the end of the next parliament (or 200,000 homes per year).
• promised to support self and custom-build, for those who wish to build their home themselves, as well as support for modern methods of construction.
• committed to renewal of the Affordable Homes Programme, “in order to support the delivery of hundreds of thousands of affordable homes”.
• reaffirmed their support for Right to Buy and pledged to extend the Voluntary Right to Buy pilot to other regions, though this relies on housing associations agreeing to participate.
• pledges support for communities living on council estates to take ownership of the land and buildings they live in
• pledge to reform shared ownership to make it “fairer and more transparent” and to simplify lease structures.
Private Rented Sector
• committed to ending Section 21 “no fault” evictions. This policy’s impact will depend on what changes we see to the Section 8 eviction process: the Conservatives have previously consulted on introducing additional eviction grounds, such as the landlord wanting to sell the property.
• promised to allow renters to transfer their deposit directly between properties.
• pledged to “support the creation of new kinds of homes that have low energy bills and which support our environmental targets”.
• reaffirmed their policy of “a ban on the sale of new leasehold homes” and restricting ground rents to zero.
Land & Green Belt
• pledged to improve poor quality Green Belt land rather than making it available for development.
• pledged an increase in property taxes for overseas purchasers. The Conservatives are planning a 3% stamp duty surcharge for overseas home buyers
Sources: inews.co.uk, Wikipedia, The Independent