Election Time! How Will The Property Market Fare?
Well, the election fever trend certainly seems to be continuing with the announcement of a general election in just a few weeks time. With most people having just recovered from the Brexit vote and Donald Trump having been elected President of the USA, recent times have certainly been tumultuous!
With so much change going on in the world, it's hard to know or predict any more with any amount of certainty just what will happen next.
In times gone by, major changes in political or economic climate have meant high reactivity in the market and people leaving or entering the market according to a fear of either sudden drops or rises in house price inflation. People would immediately react to major announcements, and this has led to a less than stable market.
However, having ridden the waves of uncertainty for quite some time now, especially since the last major recession, it seems that sentiment has evened out somewhat with regards what actually goes on in the property market. People seem to be less concerned about what is going on in the wider world and more concerned about their individual needs at any particular time.
As a homeowner, people are more aware that they need to be prepared to weather any particular political or economic storm as and when it happens. Affordability has become a major factor for lending institutions both for those buying their own home as well as BTL lending.
Landlords, developers and investors are more conscious that they need to be able to bankroll projects through the ups and downs of the market, and that if you're in it for the longer term, you have to accept that your investment may well see ups as well as downs.
One of the most important factors to take into account beside any political arena has to be the dramatic shift in ownership over the years, with a huge number of people now choosing to rent a home instead of owning one, for one reason or another. This has led, over the last 30 years or so, to hundreds of thousands of households changing over from owner-occupiers to tenants.
The needs of the housing market are ever-changing, and it is our ability to be flexible and supply the needs of a particular area or demographic which will see us through if we are prepared to stick it out as landlords.
In essence, I personally can't see that this next election will have any major impact on property market activity. I predict, as in past elections, that there will be a slow-down in activity in these weeks preceding the election, followed by a flurry of activity once the future of the country is more settled.
I do, however, feel that whoever gets in, that tenants, landlords and letting agents may well be in for a rougher ride. With all parties agreeing with policies on fairer tenancy rights and better standards of living (and rightly so on the last point) for tenants, it seems that there is still not much let-up for private landlords.
With plans for the PRS seeming to be potentially damaging to levels of stock and also to the business models of many agents and landlords alike, I have a feeling that whatever happens, the Government may well be shooting itself in the foot.
For those willing to hang on in there and weather the storm of whatever may be, there may still be a silver lining...
The required level of housing stock needing to be built and the ever-increasing demand will only put more pressure on stock levels, and it will likely be tenants who suffer with a lack of properties to rent and rent hikes being a natural result of increased costs to landlords.
If you are willing to see this as an opportunity and not a hurdle, are prepared to educate yourself as to how best to structure and build your business from here on, then you can still benefit massively from what is going on right now.
Whomever you vote for, make sure you keep well informed about various policies which will directly affect you and those you care about. To join the discussion, feel free to join us in The Property Collective Facebook Group to air your views or ask for help with what you could do next.
See you on the other side of the election!
Hazel de Kloe
Property Investor | Property Mentor | Speaker | Author
The contents of this article are for educational purposes only and we make no recommendation of any particular investment. The price of property can decrease as well as increase and you make any investments in property at your own risk.
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