HOUSEHOLDS in the UK are living beyond their means, according to the Office of National Statistics. ... [more]
Tuesday, 14 August 2018
Romans Henley sales director ANTONY GIBSON and lettings managing director MICHAEL COOK look ahead to see what the 2017 housing market could hold in store
Thinking of buying or selling?
On the whole we are expecting a similar number of property sales this year as there were in 2016. Most people moving home have motivations that don’t change just because of the political and economic landscape — if your family is growing and you need an extra room, that need is still there.
For the movers that are not in a rush, the opinions around Article 50 and whether it will be a hard or soft Brexit may cause some delay to decisions. However in the main, property prices are expected to remain steady throughout the year (although obviously sensitive to level of demand) with a few areas locally that Romans believe will buck the trend this year.
Antony said: “Crossrail is still going to play a part in house prices for the towns located along the Elizabeth Line, with West Drayton, Burnham, Maidenhead and Reading having already seen significant increases.
“Reading, however, has been highlighted as the fastest-growing town or city in the country, with a predicted annual GVA (gross value added) increase of 2.5 per cent. London is the next highest with 1.9 per cent and the UK average is 1.5 per cent.
“But this isn’t just Crossrail — there is a lot of development in the town, including residential development and a new train station at Green Park.
“Other areas that are worthy of note are Staines, West Drayton, Colnbrook, Datchet and Windsor, following the recently announced go-ahead of the additional runway at Heathrow.
“We anticipate that it will be bittersweet as some areas will benefit from the significant investment being made to infrastructure which will inevitably attract businesses, while others will find themselves in close proximity to the runway and the extra noise that is predicted — especially if they don’t fall into the compensation area.”
Lastly, following on from the autumn statement, if the ban on tenant fees goes through, and the monthly rental costs actually do go up, we could see buying becoming an increasingly affordable option.
Investing or letting in 2017?
Legislation on the buy-to-let market is continually being updated and so Romans would expect no less from 2017. But the things we know are coming and the effect we think they will have are as follows.
Changes to tax relief for landlords were mentioned previously, but Michael explains: “Obviously this will have a greater effect on those landlords with higher mortgage leveraging. Up to half of landlords, who own their properties outright, will be unaffected.
“In addition, low interest rates on borrowing coupled with positive long term outlooks on both rental and capital growth suggest that
most landlords will take a long-term view and will retain their investments.”
The announcement in the autumn statement around banning tenant’s fees is likely to have an indirect effect on property investors across the country. This could be two-fold, firstly, as it is likely to increase lettings agency fees, but secondly as rental values are also likely to be pushed up.
Michael said: “Overall this is likely to leave the landlord in a slightly better position. Add this to the widely speculated opinion that rental growth will outstrip house prices over the next five years and I believe buy-to-let is still a steady and reliable investment.” Other changes we’re expecting to see include the creation of the “Renter’s Rights Bill” (which will include detail on the tenant fee ban); extension of HMO licensing (with an introduction of minimum room sizes); mandatory electrical safety checks; a rogue landlords and letting agents register; and compulsory client money protection.
Michael added: “I can’t reiterate enough how important it has become for landlords to ensure they are completely up to date with all the legislation and the regular changes. Having a reliable agent to take ownership of that responsibility removes all the risk and subsequently makes the job of being a landlord less stressful.”
So overall, whether you’re buying, selling or investing, although recent events and surprises have slowed down the rate of house price increases, Romans’ view is that this is still a market worth investing in. Let’s watch this space.
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