Market Report 2017
Well that was 2017. Blink and you’d have missed it. It was the year, when Brenda from Bristol spoke for the population as a whole when she questioned the need for another election, it was the year that we realised that Brexit really was “a thing” the legislation for banning tenant fees was published and the year we saw an interest rate rise for the first time in a decade. There are many pundits telling you this and that about the housing market but what is actually happening to the market? What is happening on the ground in the real world not in the London centric media bubble?
Enquiries from buyers in the last six months of the year had been quieter than usual and then in the budget on 22nd November Chancellor Phillip Hammond announced that stamp duty for first time buyers would be scrapped. The floodgates DID NOT OPEN but there has been a significant increase in enquiries. First-time buyers are slowly and tentatively returning to the market. Isn’t it marvellous what a bribe can do!
The government has done its best to kill off the buy to let market in recent years with changes to stamp duty and the tax regime making it harder for landlords to make a reasonable return, but to paraphrase Mark Twain reports of BTL’s death are greatly exaggerated. Properties with a good return are selling and whilst there are less first time investors, experienced investors are still very active in the market.
Anecdotal evidence suggests that family homes in the £500-750,000 price bracket are very popular with properties selling in hours rather than days. However the million pound plus market continues to be tough despite many from the South-East relocating in advance of electrification of the London mainline.
Bristol’s mayor Marvin Rees and his cabinet member for housing Paul Smith are forging ahead with ambitious plans to build thousands of new affordable homes with many being in the social housing sector. These first of these are likely to come on stream in 2019.
With the sword of Damocles hanging over the heads of letting agents, there has already been some consolidation in the market. This is a trend I expect to see in the coming months, as the Housing Act makes its way through Parliament.
Still life goes on and the rental market has been as frantic as ever, with up to 100 applicants for some properties. Interestingly the area where the market is a little slow is at the top end again. Properties in excess of £1,300 especially apartments are struggling where supply exceeds demand.
Brexit hasn’t halted the flow of EU nationals coming to Bristol. At the beginning of the year there was a slight decrease in foreign tenants but now we are back to previous levels with Spain continuing to be the country providing the highest number of potential tenants.
If inflation carries on rising we can expect further rises in interest rates which might have a detrimental effect on the housing market. Now that the status of EU nationals has been decided as part of the Brexit negotiations we will see a continuance of migrant workers in the next year.
The housing act is going to be the game changer in the short term. How agents charge landlords will significantly change, and with the cost of moving drastically reduced we could see tenants having more power in the market as they will be in a position to move more often.
What we do know is that housing is going to continue to be at the top of the political agenda in 2018 and nobody ever lost votes by kicking landlords.
Have a Happy Christmas and a prosperous New Year.