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Market update – steady as she goes!

Market update – steady as she goes!

By Kris White

The General Election has seen the country elect a Conservative Government with a small overall majority and, to keep the slow road to economic recovery and growth on track.

The outcome is a particularly positive one for the property market in both sales and lettings and, in my opinion, whether you are a seller or buyer, landlord or tenant.

The private rental sector will benefit as proposals from Labour and left wing parties to introduce rent controls, reduce or remove tenant fees and tax relief for landlord expenditure were clearly a serious threat to an established system and will not now take place. These proposed changes would almost certainly have seen the sector reduce in size as some landlords decided to invest elsewhere. This would see demand greatly outstrip supply with inevitable increases in rents which potentially would have hurt the very tenants they were misguidedly trying to help.

I now anticipate a renewed appetite for buy to let and rental investment and, with recent changes in pensions, there may be more people looking to use property as part of their pension provision as it will provide an income, potential capital growth and the property is retained as a future legacy.

Conservative inheritance tax changes will also make it less onerous on those who inherit property.

There will also now be no introduction of a punitive annual  “Mansion tax” on properties over £2 million.

Of course we need more house building across owner occupier, private and social rental sectors. Again, a strengthening economy will give the confidence and create the environment for this investment.

Seeing an increase in the property supply side will help mitigate increases in price and improve affordability.

The Conservatives also propose to increase the scope of “Right to Buy” to include those in Housing Association accommodation. This flagship “Thatcherite” policy from the 1980’s was lauded by many but has seen the number of properties available in the social sector reduce. This time there is the promise that funds raised by sales will be used to  build more social and affordable housing.

Share prices and the pound are now unlikely to see the falls associated with an uncertain market and interest rates will likely stay low. There are some exceptional fixed rate mortgage deals available in the market today. These factors will help bolster the economic recovery. Companies will be more likely to invest and this should create more jobs and generate more income for the Treasury through increased tax revenues. It will also see a reducing benefits budget.

All in all, I believe that the election outcome will help create confidence and is the best result for the country and for the property market.

Naturally the last few weeks have seen the property market stutter a little as people have sat on their hands and awaited the outcome of the election. My prognosis for the second half of 2015 is one of improving activity levels and secure house prices. 

Now is therefore a great time to put those moving plans into action.