There are only a couple of weeks left until Brits get to decide yet another time who they think should be running their country, but what does time time bring for Britain’s property market?
Earlier this week, property firm Savills warned that the General Election in the UK will hit the housing market over the next few weeks to come, with transaction values possibly falling.
In addition to this, other statements during the company’s annual meeting revealed that sales volumes in Britain’s prime residential market have experienced a slowdown since new stamp duty rules came into play in April 2016.
This drop, although certainly present, needs to be seen in context. The comparison that happens a lot of the time is one between March 2016 and March 2017 or similar, which means between the month when the country experienced a major increase in sales due to people rushing to buy before the new stamp duty rules and the same month one year later, a traditionally quiet time that was overshadowed by developments like triggering Article 50.
So what’s actually happening to the market?
First and foremost, one thing hasn’t changed. And it probably won’t for quite some time. Housing supply in Britain is incredibly low. There simply aren’t enough houses. And this basic fact by nature increases the value of the product that’s in undersupply. In our case that’s property.
However, what’s maybe even more important is, that a lot of those statistics and numbers are driven by London and the South East. Which is a completely different beast, one that’s been hit extra hard by the stamp duty changes and not only investors but also renters being priced out of the market and making them move. Whilst those parts might not be doing so well, areas in the North are.
Sellers in England’s North West are constantly achieving their asking price, if not more. Investment initiatives and new developments continue to appear in a desperate attempt to fix the basic, underlying issue: not having enough homes for everyone.
So whilst some think it may be wise to put decisions on hold until after the election, another way to look at it may be to factor in the basics of demand and supply. And make a focused decision driven by yields and returns rather than fancy locations and prestigious names.
Because regardless of who is going to win the election, neither supply nor demand are going to change anytime soon.