Market prediction: Optimism for the 2020 rental market
If there is one thing the property market dislikes, it is uncertainty. Regardless of individual opinions about Brexit and UK politics generally, many believe the decisive result of the UK general election will lead to what some are calling a ‘Boris Bounce’.
It would appear there will be no more threats of ‘dying in ditches’ from the Prime Minister: The UK will leave the EU at the end of this month, and there are 11 months of negotiations ahead to finalise the future relationship.
Meanwhile, the biggest parliamentary majority since the 1980s will ensure the Government can pass through its domestic agenda.
Therefore, after years of political upheaval and subsequent uncertainty in the property market, last month’s general election result could herald an extended period of stability for the private rental sector.
We believe that now that we have some certainty about the UK’s political future, we should expect to see landlords return to the market. There remains strong demand for well-maintained properties and rental prices are growing at an ever-increasing rate.
Indeed, just like rents, house prices are also rising. See page 2 for our analysis of the recently released data from the Office for National Statistics, which shows there was an uplift in average property prices at the end of 2019.
The Royal Institution of Chartered Surveyors (RICS) gave an optimistic assessment of the property market, revealing that their members are expecting sales to improve noticeably both in the near term and over the coming year. They also predict house house-price inflation will accelerate and that buyer demand will increase.
Meanwhile Sajid Javid’s first budget will take place on March 11th, and the Chancellor is promising his tax and spending measures will focus on the cost of living, alongside health and the environment.
Speculation about possible stamp duty reforms are also beginning to resurface.
If it were to happen, abolishing stamp duty for properties priced below £500,000 would save house-buyers tens of thousands of pounds which would be welcome for many; although it remains unclear whether the measures would include any chance to the 3% surcharge levied on the purchasers of second and subsequent properties.
As the outlook for the next few years appears favourable this demonstrates that investing in property can still be a positive step for landlords, provided they are aided by a safe pair of hands.
haart can take the hassle and uncertainty away from landlords, allowing them to sit back and watch their investment grow. If you want more information about how we can help manage your investment speak to your local branch today.