Following the Budget the property industry has been scrutinising the proposals and the legislation that is expected to come into force in the near future with most agreeing that it’s unlikely to affect the trend of young people renting rather than looking to buy.
The government have announced that Help to Buy will be extended to 2023, which has been received fairly positively across the board, but the move is unlikely to make a big difference to urban city centres where the majority of demand sits.
In addition letting agents’ fees are likely to be banned from 2019 onwards, meaning the incentive to rent privately is increased, with the amount that landlords can ask for in deposits also capped. It is to be hoped that this will significantly increase the access to the rental market for first time renters who will then be able to afford to take their first property.
There has also been an announcement in the budget to help struggling high streets, with £675m promised to councils to allow them to redevelop unused property on high streets either into commercial space or housing. This could spark a large scale redevelopment of many town centres by converting dilapidated commercial property into housing.
In cities like Manchester, Leeds, and Sheffield this is unlikely to have a significant impact, and it is expected that demand for rental property will continue to rise across the North as inward migration towards urban centres continues.
All three cities are currently undergoing an economic revolution with small start-ups and industry giants both driving job creation and economic activity. In addition, a cluster of world class universities provides a steady stream of graduates who are deciding to settle in the cities rather than returning home.
These factors are in turn driving demand for rental properties which is good news for investors who are already involved or looking to invest. Given London’s relative slow down, it is no surprise that many of the UK’s best performing buy to let markets are found in the North.
It also follows a significant change in attitude which is now seen as easy, accessible and preferable to being tied into lengthy sales processes and huge commitments on income.
What we can say with some confidence is that, despite solid attempts to make inroads into the housing issues, the government isn’t likely to stem the tide of rental demand in the cities any time soon.