The best way to judge the UK housing market is to check on what’s happening in Parliament, not the price indices nor the Bank of England.
That’s the view from Tom Bill, research guru at Knight Frank, as the country anticipates a series of policy announcements around the tie of the Autumn Statement in three weeks time.
Knight Frank says this trend towards politics not markets is already underway, with recent media reports suggesting the government is considering measures to help buyers, including extending the mortgage guarantee scheme which enables lenders to offer 95 per cent mortgages, as well as other proposals to encourage saving for a deposit.
But Bill cautions: “There’s only so much the government can do given the bigger picture of interest rates that are normalising after 14 years. It has been a white-knuckle ride for anyone buying or re-mortgaging over the last 18 months … Stubbornly-high inflation means the seasonal autumn bounce in the housing market has been minimal this year … as buyers come to terms with higher rates and sellers with lower asking prices.”
He says a more eye-catching plan reportedly being considered by the Chancellor is a stamp duty cut.
Bill says such cuts have to happen immediately and rises (or the end of a stamp duty holiday) need to happen gradually, not the other way round. Otherwise, the risk is a stop-start market or one that becomes clogged up.
He adds that: “The problem with all speculation at the moment is that the opinion polls currently point to a change of government next year … Discussions about what the government might or might not do feel particularly moot at the moment.
“That extends to the Renters Reform Bill, which is currently going through Parliament. There have been arguments over the abolition of Section 21 no-fault evictions and whether this will need to wait until the courts are ready to cope with the workload. It has become a politically-charged debate, but a Labour government could abolish no-fault evictions whether the courts are ready or not.”
And Bill concludes: “Campaigning hasn’t begun, but these multiplying uncertainties show the election countdown has now started for the UK housing market.”
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A Labour Government may abolish Section 21 suddenly, and could introduce both an eviction ban and a freeze on rent rises. They could copy the actions in Scotland.
However, this is predictable and therefore they are likely to inherit a housing crisis, as landlords prepare for those possibilities before an election.
The renters reform legislation has paved the way for this to happen. As Nick said yesterday, couldn't there be a human rights challenge to that legislation? Landlords are set to lose control of their properties to the state, but there is no benefit to tenants at all because they will be unable to find anywhere to rent.
I have predicted the end of BTL. Both the Tories and Labour are strongly anti landlord. Labour more so of course. I can’t understand why some people are waiting to see what happens to the RRB before they make a decision. I can see a long queue forming and some not making it to the front. S21 being abolished quickly and eviction bans bought it.
The Scottish rental sector has continued only because their legislation did not apply to existing tenancies and landlords were still prepared to let to people whom they were confident would leave at the end of their course etc.
Allegedly the SNP with their little green helpers are looking to plug that "loophole". Even new tenancies will be subject to rent controls. How the heck they're going to control that is another matter.
It's currently at consultation stage - reported in The Telegraph yesterday
Hope for the best BUT prepare for the worst!
The far left extremists eventually eat themselves, as we are seeing with the SNP in Scotland. It's been 44+ years since Labour last had a play at socialist economics and assuming the current outbreak of internal anti semitism doesn't consume them they are likely to win, at that point the young who voted for them will learn rapidly that 1975 isn't a just a pop group but a chaotic collapse of the country, and they've voted to give it another re-run. As I try to explain to my various young relatives there was a good reason why the Country voted for Baroness Thatcher in 1979, 1983, 1987 and I don't particularly want to return to the 1970s despite being a lot younger and carefree in those days, the strikes (Labour have already promised to allow those), the power cuts (The green extremists will encourage those), the Mass unemployment (the first two will ensure that) and the economic collapse (Pulling out of trade deals and begging the EU will ensure that) are pretty much what Starmers lamas will bring with them as the young learn from bitter experience why when we were young we voted for a bossy, cold and cranky woman from Grantham to take over the Country.
Could not agree more with you on that John despite being only 6 years old in 1979. The country was desperate back then.
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