22 April 2015
This month we are delighted to feature an article courtesy of Jonathan Rolande of House Buy Fast.
There’s no doubt that the Election on the 7th May is going to be one of the most unpredictable in living memory. Gone (for now at least) is the old 2 to 3 Party politics and on May 8th we may be waking up to a Coalition of all shades. The economy has been at the heart of the debate of course and not far behind that, housing.
In the last week the Tories have announced a 1980’s style sale of Housing Association Property which would give people who may not otherwise be able to afford it, the chance to own their own home and in doing so may just convert some traditionally Labour voters to the cause.
Much has been made of the lack of affordable housing given the slow rise of wages compared to rents and home values. The Help to Buy Scheme much praised by many has helped some but has likely also led to further price increases by injecting more money into the system already blighted by a remarkable lack of new property. In other words demand is huge and supply is not – a cause of inflation across the years.
On the other hand Labour have pledged to build 200,000 new home by 2020 with priority for local First Time Buyers. Increasing the supply by 40,000 properties a year would certainly help stabilise prices but given the likelihood of a powershare and the likely difficulties with Planning Authorities for so many new homes it may be an optimistic target.
But in the short term at least, what will be the effect on the property market at large?
Well in spite of the rhetoric, my guess is that the current mini boom many parts of the country are going through will continue come what may, fuelled by ultra low interest rates, high demand, a property shortage and growing, more affluent population.
In areas not currently blossoming not much will change. It takes years, if not a decade for real change to be felt in areas neglected for so long almost whatever party greets us over breakfast on the 8th May and whatever policies they can implement. The underlying issues in poorer areas – lack of skills, employment and infrastructure – will continue to be the greatest influence on property values.
So, in line with what has been happening for the last ten years or so at least, there will be both boom and bust simultaneously within our country, areas of extreme growth and areas that seem to offer little hope. To rectify that is the real challenge of the winning party this May.