House Prices are still on the rise - despite the election

Housing market consumer confidence has not been dented by the forthcoming general election. House prices are still on the rise, according to a survey out by Rightmove. People are confident that house prices will be higher in 12 months time, despite the fact there may be a new party in power.

There is an increase in home-movers believing that the market will improve, 18% up from a year ago.

Confidence is holding up in spite of uncertain economic times and the prospect of political change. Optimism is at the highest it has been for the past three quarters.

There has been some nervousness over interest rates, but it has been blown out of proportion, after having eighteen months of a downturn in the market it is now time to look up and move ahead.

End to recession fears brings buyers back

The UK’s top tier property markets experienced a buoyant month in April, with Prime prices increasing by 0.5% to £449,689 and Prime Platinum prices rising by 1.1% to £625,849. Annual growth of 3.2% and 6.0% was recorded for Prime and Prime Platinum respectively.

The slightly subdued start to the year has given way to a much busier period of activity, driven by a release of substantial pent-up demand. Consumer confidence climbed this month, amidst clearer signs that the economy is stabilising and a double-dip recession has been averted, resulting in a flurry of buyers returning to the market.

Now more optimistic of a lasting property market recovery, many buyers who had been putting off their move over the winter have taken the opportunity to purchase. This is particularly the case for families hoping to upsize to a larger home further out of town, fuelling competition for these types of property.

Supply-demand balance restored
The level of quality Prime stock increased by 4.4% in April, making it 41% higher than its level twelve months ago. However, supply is now being balanced by strong buyer demand, with all the typical characteristics of an active spring market being displayed.

Election could be tonic for the market
Astute buyers and investors see this as a good time to purchase Prime property in the right location and the General Election is unlikely to stall property transactions across this sector. Wealthy UK and overseas buyers will be largely unconstrained by the financial impact of any tax changes and the prospect of a new government may even help to strengthen the already improving consumer optimism.

All evidence points to a continued high volume of activity post-election, when the economic and financial outlook will be clearer, and we could be facing a busier than usual summer as home movers and investors prioritise property transactions while the timing is right.

Extract taken from Primelocation

Downing Street drops in value

Downing Street is valued at £4.5 million, a drop of 9.18 per cent since Mr Brown became Prime Minister in June 2007, costing the taxpayer more than £460,000.It is in sharp contrast to Tony Blair who saw the property’s price climb from £1.65 million when he took office in 1997 to more than £5 million when he handed the keys over to Mr Brown.

There is a change in leadership over the next few weeks, Gordon Brown is likely to drop quite a few rungs on the property ladder as house prices in his own constituency of Kirkcaldy are among the lowest in the country, averaging £120,910 compared to his current address in SW1 where average house prices are £920,361.

This is quite ironic, Downing St, in common with a great deal of other UK property - tripled in value from 1.65M to 5M in ten years.

Downing Street drops in value

Downing Street is valued at £4.5 million, a drop of 9.18 per cent since Mr Brown became Prime Minister in June 2007, costing the taxpayer more than £460,000.It is in sharp contrast to Tony Blair who saw the property’s price climb from £1.65 million when he took office in 1997 to more than £5 million when he handed the keys over to Mr Brown.

There is a change in leadership over the next few weeks, Gordon Brown is likely to drop quite a few rungs on the property ladder as house prices in his own constituency of Kirkcaldy are among the lowest in the country, averaging £120,910 compared to his current address in SW1 where average house prices are £920,361.

This is quite ironic, Downing St, in common with a great deal of other UK property - tripled in value from 1.65M to 5M in ten years.
Nothing was created - certainly not a tripling of wages to afford to pay mortgages on properties three times as expensive.

This was a bubble, manipulated by a deliberately weak regulatory climate which enabled soft mortgage deals and ultra low interest rates - from which countless billions were leveraged from the same assets.

Who were the real winners in our first televised prime ministerial debate?

The first televised prime ministerial debate in UK election history was held last night and there's much discussion about who came out best and worst on policy.

After weeks of preparation and practice, Gordon Brown, David Cameron and Nick Clegg finally took to the stage to debate. As soon as the credits rolled the party spin doctors were out in force telling the media hordes that their man had come out top.

Whilst the papers have heaped the most praise on Nick Clegg, I can't belive from looking through the papers mysef today, just how much attention is being made to the colour of thier ties, did they twitch much, did they smile enough.

Surely the whole point of these debates is to inform the public of each parties policies - if you took the time to sit and count the column space in todays papers you'd find just a small amount of information on what was actually debated and more column space on who won or not.

What the forthcoming election will mean for the property market

Last year saw a remarkable turnaround in the UK property market and although there will be further challenges in 2010, most notably the general election; a recovery is underway, according to a new report.

This year has got off to a very satisfactory start and sentiment in the property market has improved as mortgage finance, while still restricted, continues to cheapen.

The prime property market remains buoyant, with a deficit of available properties and currency weakness attracting a steady stream of overseas buyers. With prices showing some recovery, we hope to see more properties coming to market over the course of the year, especially family houses where there is still a significant shortage.

In the lettings sector a limited availability in stock reflects a return to historic levels, without significant upwards price pressure, the report shows. Corporate rentals are slowly returning, although they still remain well below the levels seen in 2007. The report predicts that the rental market should continue to firm up, with shorter void periods and limited upward price pressure.
 
The big unknown of 2010 is the general election, with a hung parliament now being tipped as a relatively likely possibility, which could herald a period of uncertainty in the property market. But the report concludes that it is easy to over estimate the impact this may have on the housing market and the economy generally.
   
Although general elections do not usually have much sway on the property market in the UK, this year’s election could have a greater impact, particularly on mainstream real estate, than past elections because of where we are in the housing cycle.
  
Because the property market is already in a state of low turnover and is only partially functioning due to the global financial crisis, it is perhaps more vulnerable to the slightest political changes, according to a residential research director at Savills.
 
‘We have a partially functioning market where recent price growth has been driven by cash and equity rich buyers chasing low stock levels. With continued constraints on mortgage lending, the market is heavily dependent on sentiment amongst a certain class of buyer, particularly against the background of continued economic uncertainty,’ he explained.
 
‘We expect to see these low transaction levels continue up to the election and through the immediate aftermath as political uncertainty makes buyers and sellers pause for thought. In itself this could cause volatility in price movements, with possibly more short term downward pressure on prices in the mainstream market than we have seen in the past twelve months,’ he added.
 
‘Without doubt, and probably regardless of which party wins, an outright majority would be the best outcome for the housing market in 2010, and possibly through to 2012, the year we have penciled in as the start of a more sustained housing market recovery.’

Extracts taken from Property Wire and BBC live

Stamp duty break already shows results

Estate agents and mortgage lenders are already reporting surges in demand from prospective first-time buyers after the Government's announcement of a two-year stamp duty holiday for them.

It means a tax saving of up to £2,500 for genuine first-time buyers on property worth up to £250,000.

Last year's stamp duty holiday on properties worth up to £175,000, which ended on December 31, stimulated the market, the latest move on stamp duty will have a similar effect.

HIPs to be Abolished confirm Conservatives

The Conservatives announced in their 2010 Election manifesto on 13th April 2010 that they indeed plan on abolishing the Home Information Pack if they get into power. They would also make the lower limit on Stamp Duty £250,000.To quote the manifesto;

“Help first-time buyers get on the housing ladder, by increasing the stamp duty threshold to £250,000, so that nine out of ten first-time buyers will pay no stamp duty. This is a permanent tax cut, unlike Labour’s plans which are just for two years; and Abolish Labour’s expensive and unnecessary Home Information Packs which increase the cost and hassle of selling homes."

At these early stages the polls are key. The sooner they show a clear winner, the stronger sentiment will be and prices and mortgage offers will stay firm. Uncertainty will operate in the opposite direction with people sitting on the fence unwilling to make a decision.

How will this election effect UK property?

The date is set for May the 6th, now is the time to consider how this election will effect the property market in terms of activity and prices.

Markets are as much about sentiment as supply and demand. This election brings with it a fair amount of uncertainty, the bookies claim that the Conservatives are favourites to win; others claim that there will be a hung Parliament.

If there is a clear winner, perhaps a Conservative win, prices may creep upwards. If there is a Hung Parliament, or Labour remains in power, they will remain level or indeed may even drop.

It is still quite a difficult time for the property market; we are vulnerable to any changes, especially political. At present we are riding on the back of cash and equity rich buyers chasing very few properties. Undoubtedly an outright majority would be the most beneficial outcome for the housing market.

Mortgage lending is still sluggish, and the market is quite dependant on sentiment. These factors make for a period of uncertainty leading up to the election. Transactions may be low in the lead up to and during the aftermath of the election, while people catch their breath. This could cause a fluctuation in prices.

 
The housing market will only be truly stable and grow under a new governing body if there is to be a general economic recovery, clarity on interest rate movements, true extent of public spending cuts revealed, availability of mortgage finance, Incentives to expand in the private rental sector, new housebuilding, increase in property stock, stamp duty and other hindering factors.

Proposals for the housing market by the main political parties

Labour

• Up to 10,000 new council houses a year by 2014-15, and more affordable housing.
  Councils will retain their rental receipts locally, enabling them to support housebuilding and maintain properties.
  Two-year stamp duty holiday for first-time buyers on transactions up to £250,000; permanent new stamp duty top rate of 5 per cent on transactions over £1 million from April 2011.
  
• Agreements with banks to lend £105 billion to homebuyers and businesses over the next year.
  
• The standard interest rate on the Support for Mortgage Interest scheme will be maintained until December.
  
• A crackdown on tenancy cheats who fraudulently sub-let social housing.
  
• Guaranteed housing standards for social tenants; measures to strengthen consumer protections for private tenants.
  
• New homes to be zero carbon by 2016.
  

Conservatives

• Permanently increase the stamp duty threshold for first-time buyers to £250,000.
  
• Abolish Hips.
  
• Reward councils for building more homes by allowing them to keep more of the proceeds from council tax and business rates from new development.
  
• Create local housing trusts to allow communities to build affordable homes.
  
• Abolish the unelected tier of regional planning, allowing local communities to determine the right level of development.
  
• Give councils stronger powers to prevent infill development in suburbs, and build more family homes.
  
• Give council tenants an equity stake in their home to restore pride in their area and encourage social mobility.
  

Liberal Democrats

• 
  Bring 250,000 empty homes back into use by giving owners cheap loans to renovate them.
  
• Energy improvement packages of up to £10,000 per home, paid for by the savings from lower energy bills; new homes
  
• To be fully energy efficient.
  
• Repossessions will be stopped in cases where the lender has not pursued options.
  
• A new planning “use class” for second homes, allowing communities to control the number of homes given over to holidaymakers.

Extract taken fro the Times online

 

 

Election fever has started!

Election fever has started, and like most of us, I am interested to know how it will impact on us and in particular the housing market.

The Sunday paper landed on the mat, and sure enough, it’s full of the upcoming election.
I turned straight to David Smith’s article in the ‘Home’ section.
“We now know March was a good month for house prices, with the Halifax and Acadametrics both reporting 1.1% rises, following the nationwide increase a week earlier. If the housing market is going to suffer a pre-election seizure, it is leaving it late. The Halifax has prices up by 6.9% from March 2009, while Acadametrics, which used to produce the Financial Times house price index, has them up 13.4%

Bonuses have made a comeback, but so, even more spectacularly, have London prices. Prime London houses have recorded a rise of 51% from their lows, while flats are up 44%. For both houses and flats, the rises were sufficient to take prime prices in the capital above previous peaks. Anybody who bought at the London market low was a smart cookie.

So where is this market, which tends to lead the rest of the country, heading? Peter Young, John D Wood’s managing director, notes it is still being driven by foreign investors and bonus purchases. He warns, however, of the “headwinds” from the new 50% tax rate and a potential austerity budget to follow the election (though we’re all in the dark about that).

Something else has been happening that could remove the shine. Partly as a result of developments in Greece, and partly because currency markets have decided they are not so worried about the election, sterling has been creeping higher against the euro, removing some of London’s attraction for continental buyers. That may yet change, particularly if we get a hung parliament. For the moment, however, London no longer looks like the bargain it was a year ago.

With the Conservatives coming to power we could see the speedy abolition of Home Information Packs which would inevitably lead to a rise in properties listed for sale and the return of the speculative seller.  It will be interesting.