Happy New Year!
Some thoughts on the property year ahead from Allan Morris of Malvern – Your local property experts
Welcome to 2016. It promises to be an eventful-packed year. The way has already been prepared for a change in April when higher stamp duty rates are applied to properties bought for second home purposes or buy-to-let. So we expect a busy time for the next few months as buyers rush to complete purchases before the axe falls. Mr Osborne will further affect landlords as from April as when they will also lose higher-rate tax relief on mortgage interest payments.
And what is happening with the ripple effect – the radiating waves of finance that the London property market has on housing locally, as capital dwellers move out to the counties? London now seems more disconnected and unaffordable than ever from the rest of Britain, as prices have spiralled. That unaffordable tag does now also affect the super-rich. Prime London properties are seeing a significant fall as higher taxation, the slump in worldwide oil prices and the Chinese economic slowdown have had a severe impact on the cash flow for property.
So what about those people who merely want a roof over their heads? Well 2016 may be eventful-packed for them also including a predicted lift in house prices of between five and eight per cent. But it will be a slow start. 2015 saw ten consecutive months nationally of instruction decline. The stock of available properties is currently the lowest ever recorded. The law of supply and demand suggests this should have a positive effect on prices in many parts of the UK.
It is also difficult to predict what any long-anticipated interest rate increases will do to the property market should they be introduced, or what might happen if the UK heads for the Brexit following the European referendum. Even if there is a vote to remain in the European Union the uncertainty may well spook the property market for a few months – if the last general election and the Scottish referendum are anything to go by.
So 2016 will certainly not be without its challenges in the property market. But with our experience we are used to handling challenges for our clients. This year will not be a perfect one for property speculation. But it will be a good year for settling into a home that provides safety, warmth and shelter for you and your family in these uncertain times. Whatever is going on in the world any year is a good year to do that.