Congratulations Theresa May on becoming the 76th prime minister and the 2nd ever woman to be in power. Before I delve into the possibilities of what might happen to the property market under Mrs May, let’s take a moment to look back on what happened when the 1st female prime minister came into power, Margaret Thatcher.
It is hard to overstate the immense impact that Mrs Thatcher had on the property market. In 1980 a new housing act was created which, in short, allowed council tenants to buy their homes at a very nicely discounted price. Over the next decade c. one million council houses were sold off and very little more were built! This was then followed by the creation of Assured Shorthold tenancies, which I am sure every letting agent is thankful for today. This meant that tenants no longer had full security of tenure and Landlords could rent their properties at market rent, before this point it was often more economical to leave your second home empty. Houses with ‘sitting tenants’ (pre 1988) were half as valuable to sell and could only achieve the rent given by the rent officer every 2 years, however in recent times these regulated tenancies have seen a rise in price due to the security of income. This in turn has moulded the booming property market that we see today.
So here we are in 2016 leaving Europe and wondering where our property market will go. Leaving the EU was always going to be an uncertain time for Britain and with the RICS publishing last week that, the number of people wanting to buy a house has fallen below the level of 2008, it’s no wonder people are now more nervous than ever about their house price. But if you’re not walking on a tightrope above negative equity then don’t worry, perhaps it could be the time to be buying another property? The more than ever prepared, Mark Carney is injecting 250 billion into the economy, which leaves banks still open for business and with interest rates being reduced to 0.25% why not borrow to buy a property? Temporary less demand, temporary nervous sellers, temporary dipping prices and a quick influx of supply, what more could a buyer ask for?
The truth is, besides blips in the market, the UKs property prices have been on the rise since the mid 90s and its so simple why? Supply and Demand, we don’t build enough houses. Our target is 250,000 per annum and last year we managed 155,000. Theresa has a tough ask on her hand to increase this as we don’t have enough skilled tradesman here and, the skilled tradesman that once may have ‘freely’ moved into Britain, may not find it as easy. Let’s not forget that if you don’t own a home the government will subsidise you to help you get on the ladder, which essentially only pushes property prices up anyway, but that’s another story.
So why not grab yourself a cheap loan and place a cheeky bid!