January 26, 2017
London property – New homes, January buyers and the ban on fees
The London Property market has now firmly entered 2017, but it seems unlikely that this year will top last year for drama, controversy and unpredictability – which, many may argue, is no bad thing.
Of course, this year is once again set to be dominated by talk of Brexit – with Article 50 ready to be triggered in March and the formal process of Britain’s withdrawal from the EU starting in earnest.
But the world of property, as was the case in 2016, is set to see some major changes in 2017 too, with the phasing out of mortgage interest tax relief the most high-profile of these.
Here, we take a closer look at the issues currently affecting housing and London property…
The government’s much-anticipated White Paper on housing, which was originally expected to be published as part of November’s Autumn Statement, is anticipated to see the light of day at the end of January, although the government has already postponed its release on a number of occasions and there is no guarantee that this won’t happen again.
The White Paper is expected to set out government plans on affordable homes, boosting supply, planning, investment and a range of other topics. There is likely to be further talk of Starter Homes and the government’s ambition to build one million new homes by 2020.
There might also be outlines of plans to manufacture homes off-site – in a revival of the prefab homes boom that served the country so well in the aftermath of the Second World War – as well as further details about the recently announced garden towns and villages initiative.
Home movers and property sellers
It’s nothing new, but Rightmove – the UK’s busiest property website – once again witnessed record traffic during the festive period. In fact, between Boxing Day and the early weeks of January, traffic levels were up by 5% on the same period a year ago. The hike in activity since Boxing Day – when many provisional, preliminary searches are begun – is good news for those looking to sell a home in early 2017.
It shows that demand for homes is still very much there, despite the challenges posed by Brexit and possible economic and political upheaval. Rightmove’s data also showed that prices overall rose by 3.2% in 2016, while the past month saw a 0.4% (£1,086) rise in the average asking price of a property being listed on the market.
In other news, recent findings from a NatWest report have put to bed any fears that increases in inflation might quell the cheap mortgage deals currently being secured by many house buyers.
“While data from the Bank of England does show that the average quoted rate for some fixed-terms crept up in December, they are still significantly lower than they were just 12 months ago,” NatWest’s research reassured.
The high-street bank predicts that domestic borrowers will not be adversely affected by rising inflation in the short-term. Mortgage rates for new borrowers are still cheaper than they were a year ago – at the end of 2016 the average mortgage rate for new borrowers was 2.17%; a year previously this figure was 2.68%.
Lettings and landlords
The controversial ban on letting agents’ fees charged to tenants isn’t set to come into play until 2018 if the government’s timetable for consultation is anything to go by.
While the government has committed itself to introducing the ban as soon as possible, it has also committed itself to a consultation period beforehand – which is due to begin in March or April.
With the consultation not due to get underway until spring, everything points to the ban not being enacted until 2018 at the earliest.
David Cox, managing director at the Association of Residential Letting Agents, has welcomed the proposed consultation: “The [government] has acknowledged the importance of a detailed consultation into the proposed ban on letting agent fees and that an Impact Assessment will be carried out. It is essential the government [is] completely aware of the full range of practical implications the ban on fees would have both in the short and long term.”
For more help and advice on buying or selling a home in London, please get in touch with Atkinson McLeod. To give you an idea of how much your home could be worth in the current marketplace, we also offer free and instant online valuations.