What’s the impact of the election on the housing market and our financial prospects?
The political uncertainty resulting from the election of a minority government might encourage more of us to put off any thought of moving for a few months. This would add to a property slow down which has already led to three consecutive months of falling house prices and the longest period of down turn since 2009. However, dropping prices present good opportunities for those willing to speculate and the weaker pound will also be attractive to foreign buyers.
For those people who are confident about their overall financial position this represents a good opportunity to trade in a less crowded market place.
Still reeling from the Tories policy changes in 2016 which stripped tax benefits, loaded extra stamp duty and removed wear and tear allowance private landlords will be hoping for some respite in the short term. Some post-election policy reversal is probably too much to hope for but given the overall political and financial uncertainty (plus Brexit) landlords should at least be spared any further negative changes.
Although there has been an increased focus on the rental market with the introduction of build-to-rent developments particularly in London, there remains a significant shortfall of good quality and affordable rental accommodation. Following their election the new government will need to focus on ensuring that the UK has a balanced rental sector that attracts landlords and investors whilst also looking after the legitimate rights of tenants.
The young certainly made their feelings known through the ballot box at the election so maybe the government will heed some of their concerns. An extension of the Help to Buy scheme looks a distinct possibility with the inclusion of older properties and stamp duty reductions possibly on the agenda.
With so much uncertainty around because of the election result it is hard to know what will happen to mortgage rates. One school of thought is that now is a good time to take advantage of the several cheap deals that are available before they disappear. Others consider that the likelihood of any significant rise in interest rates is distinctly unlikely and that the cheap deals will be around for some time to come. Indeed, if mortgage demand continues to fall there may be better deals and incentives yet to come.
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