With recent buoyancy in the property market, and various moves afoot to ensure a continued recovery, David Knapp from Hart Brown solicitors comments on the state of the market.
As we reach the latter stages of January it seems an age ago that we were waiting on the outcome of the 12th December election and the associated consequences of how the Brexit saga would proceed, or, stagnate further.
A sluggish end to a reasonably active property market in 2019 was a product of the usual winter slow down and the 5 week lead into the election. There was a real benefit in the unusual December election from a property market perspective, as the end of year lull in the market coincided with the lull that usually occurs when there is an election. The combination of two events producing one combined lull at the same time avoided a far longer lull had, for example, the election been announced in January as taking place in late February or early March.
Without a doubt 2019 was a unique year in political terms but had a huge impact on businesses, the economy and therefore the property market. Without wishing to revisit the past, it is worth briefly reflecting on a year where we had a paralysed parliament, caused by the extraordinary Brexit saga, all the associated shenanigans culminating in a very toxic election campaign and the eventual election that was so desperately needed to try and bring stability to all of our lives that we all required.
Although the new year is very fresh there have already been perceptible signs of the residential property market waking up and more buyers and sellers having the confidence to look to buy and sell. Our residential property department has already had a number of clients making contact with us agreeing deals on their sale of top end properties that have been marketed for up to 2 years without hither to having had any sign of interest. The number of new instructions for our residential property department in the first two weeks of January is higher than any January I can remember.
The dispelling of concerns about another hung Parliament and some real action and movement in the Brexit fiasco has given those looking to enter the property market a real positive boost. This includes many of those who have been in the less than buoyant market over the last 18 months or so.
Allied to this optimism are other potential boosts to the property market that could well occur in the coming months to give the residential property market every chance to shrug off the malaise of the last 2-3 years.
We are all very aware of the huge issues with many town high streets caused by high running costs of the commercial premises and the ‘clicks instead of bricks’ philosophy of the internet taking over a large percentage of retail sales. This could well result in interest rates being lowered which would then be passed on to the public via a reduction in residential mortgage interest rates.
The government also seems intent to find ways of attracting first time buyers back into the property market and interestingly a number of separate months in 2019 saw the number of first time buyers coming into the market at its highest rate for a decade or so.
The government clearly need the income from stamp duty in order to carry out their manifesto promises, and it is therefore in their interest to have an active property market and an increase in the number of sales of residential properties. There seems to be speculation that in the budget on the 11th March that stamp duty may be scrapped below the £500,000.00 threshold. The Prime Minister has mentioned this in the not so distant past.
Having propped up the economy for many decades, there would be a huge negative impact on the finance of this country if we were to become a rental society akin to some of our continental neighbours where the number of property owners is a much smaller percentage than in the UK.
There is a promise that the conveyancing system will be overhauled with the introduction of Reservation Agreements that had some airing during the course of 2019, a review and possible legislation related to leasehold properties and possible further tax legislation to make it less attractive for buy-to-let landlords.
The pricing/value trends of the current property market does have its benefits in that the value of properties are neither increasing hand over fist nor dropping like a stone. As a result there is minimal gazumping or gazundering which results in an unstable practical running of the property market. The downside of static property prices is that transactions do take longer which is not ideal from anyone’s point of view.
There is more often than not positive increased activity in the Spring property market in the South East and the first 10 days of the 2020 market certainly bear this out albeit with fairly static prices.
The next 6 to 8 weeks will hopefully prove and show that this is not a false dawn.
To discuss your next house move, please contact David directly on 01483 887766 or by email at DSK@hartbrown.co.uk.
This is not legal advice; it is intended to provide information of general interest about current legal issues.