After a few U-turns per budget since 2015, can we expect any surprises? The pre-announced policies that are of interested to the UK property market include:
The government looks set to promise to build 300,000 houses per year, which comes as positive news as a lack of stock continues to drive up price and demand.
According to Sky News, ‘An inquiry into so-called “land-banking” by developers is also expected to lead a list of measures to try and boost Britain’s housing supply, along with an attempt to reinvigorate small and medium-sized builders.’ This could yield some interesting results.
Further to that, there are rumours that the Chancellor may well cut stamp duty for first time buyers in an attempt to help them onto the ladder.
Can the government make the housing market more accessible for first-time-buyers?
In a report conducted by MFS, it was revealed that, of 2000 people surveyed, a humungous 80% said that they have no confidence in the government when it comes to resolving the housing issues in the UK.
Keeping on-topic, the government has failed to inspire any confidence in UK home owners and voters that it know how to resolve the issue of struggling first-time-buyers (FTBs).
Furthermore, it was asked what it felt the ‘keys to success’ were when it came to buying a house. Having a very clear idea of budget and desired property from the outset ranked as the number one priority, having immediate access to the required funds ranked second, whilst being chain free came in third.
It will certainly be interesting to note whether the government is able to regain this trust or cultivate an image of a group of politicians who recognise and understand the problems facing people.
It’s unlikely, overall, to affect housing prices or demand, as we’ll discuss next.
Low stock boosts growth
The Office for National Statistics (ONS) and the Land Registry have released new data which confirms house price growth of 5.4% in the 12 months to September of this year, which represents a 0.6% increase against the previous month.
This, it said, has brought the average house price up to £226,000, £11,000 higher than last year and £1,000 higher than the previous month.
Interestingly, the North West showed the highest annual growth, with prices increasing by 7.3% in the year to September 2017.
The cause, according to the writers of the report has been a relatively low stock level, meaning that those looking to purchase a property, or to upgrade, are forced to look at fewer options before choosing to buy. Buyer demand hasn’t noticeably declined in that time and, subsequently, the same demand for fewer properties is driving that growth.
Prices have grown 600% in 22 years
As if to cement the fact that house price growth remains one of the most stable and reliable growth indicators in the UK, it was confirmed by research conducted on behalf of London estate agents Keatons.
House prices began their stratospheric rise under Labour Prime Minister Tony Blair, and have continued roughly along the same path ever since. The craze for buy-to-let and freely available lending at the time meant that a vast majority were able to enter the housing market relatively cheaply.
London remains the biggest jumper, at a growth rate of 645% in a little over 20 years, whilst other areas were a little over or a little under.
It’s unlikely, given public opinion and government intervention, that we’re likely to see similar leaps over the next two decades, but whether that intervention materialises or makes an impact is yet to be seen.