April 25, 2017
Housing market awaits another General Election
In a move that almost no-one saw coming, Prime Minister Theresa May recently announced the UK is to hold a snap General Election on June 8. Our latest property market update focuses on this unexpected announcement as well as the latest house price news, empty homes and more…
How could the General Election affect the London property market?
We’re facing another General Election just two years since David Cameron saw off Ed Miliband to secure a second term as Prime Minister. Theresa May’s announcement may have come as a surprise, but many housing commentators have said it could be regarded as a positive move. The prospect of a more settled and certain Government come the summer is certainly enviable and it is hoped this outcome is achieved after June 8.
In the meantime, a shorter than usual campaign period means there is less time for the property market to be affected. However, as with any election, some movers or tenants are likely to delay property-based decisions until after the election.
As we’ve seen in 2015 and 2016, though, despite uncertainty and what seems like constant election periods, the property market – and in particular London – has remained robust and reliable.
Good news for buyers as London asking prices cool
Average asking prices in the capital have been rising more or less every month at a steady rate for the past few years. So much so that, according to Rightmove, the average London asking price is now over £600,000.
Prospective property buyers will be pleased to read, however, that asking price growth cooled slightly in April, with typical prices 2% lower than in March. On an annual basis, prices were 1.5% lower this April than the previous year.
These small dips will be very promising for buyers, while sellers needn’t despair as average house prices remain exceptionally high and a slight dip in growth may encourage more buyers to enter the market.
Filling empty homes could be the key to solving housing crisis
We’re often reminded of the undersupply of homes in the capital and one contributing factor is homes left empty by property owners. According to research by Property Partner, there were almost 20,000 homes left idle for over six months last year in the capital alone.
This equates to property value of over £9 billion (using an average property price of £474,704).
Bringing more of these homes into use could help to alleviate pressure on the London market and average house prices. If there were more incentives not to leave homes empty, then property supply in the capital could receive a timely boost.
Are smaller, cheaper properties the way forward for buy-to-let?
Landlords are increasingly seeing the benefits of purchasing smaller and cheaper properties, according to research from Mortgages for Business.
It found that average loan amounts and security values on buy-to-let purchases fell in the first three months of 2017.
Property investors have had to deal with several new measures over the past couple of years, most notably the restriction of buy-to-let mortgage interest tax relief and a 3% stamp duty surcharge.
As landlords’ costs go up or their incomes go down, it looks like they are finding different ways to carry on investing. Despite change and some political uncertainty, property investment continues to be a safe bet in the capital.
That’s it for this month, we’ll be back with another update in May. For advice on selling or letting a home in London, you can get in touch with your local Atkinson McLeod office.
And, to find out how much your property could be worth on the current market, you can request a free instant online valuation here.