Just in terms of a political upheaval, you would be hard-pressed to come up with another period in time where so much has changed in so short a time. We all felt the referendum was a seismic moment in UK politics, but I think most deep down felt the ‘status quo’ would triumph in the end. How wrong we were. Since those votes were cast, we’ve seen more comings and goings than a revolving door convention and one gets the sense that there is much more to come, particularly if you’re a member of the Labour Party.
Those of us working within the property market have been trying to make sense of what it means for us, our clients, and our businesses, and the honest truth is that it’s incredibly difficult to say at the moment. We’re in danger of turning the phrase, ‘a period of uncertainty’ into something of a cliché but this is undoubtedly what we’re living through.
The property market is of course reacting and agents will know that better than anyone what that means, whether it’s vendors dropping asking prices, potential purchasers pulling out, or others who pre-referendum were on the verge of making their move now deciding it would be better to take a ‘wait and see’ attitude. One suspects, and I’m hearing this anecdotally, that the purchase market is not reaching dizzy heights at the moment, and with the summer holiday season upon us one must think that this isn’t going to change for a number of months.
Politically however there may be some positives to hold onto. They come from the first utterances on housing by the new Prime Minister, Theresa May. In her pre-appointment speech in Birmingham she spoke of the need to get more houses built and to get more first-time buyers onto the housing ladder. She said the same in her first speech outside Number 10 – a Government not for the ‘privileged few’ we were told, but for those who wanted to own their own homes. Now, of course, we’ve been here before, for some time now, and the undersupply of new homes in the UK is still huge but will the new PM be able to turn this around and will first-timers benefit the most.
Certainly, the focus on helping first-timers – at the expense of buy-to-let landlords no doubt – which began under David Cameron and George Osborne, does look likely to continue under Theresa May/Philip Hammond. What this actually means in practice however is still vague. Undoubtedly the Help to Buy Scheme – in all its forms – has been viewed as a real success, particularly HTB1 which covers off new builds. That part of the scheme has already been extended until the end of the decade, and it appears likely it will become a permanent part of the housing furniture.
Help to Buy 2 however – the mortgage guarantee element – is due to finish this year, but given everything else on the Government’s plate will it also be extended? I think it might especially as it will need little effort to do so and indeed will at least guaranteed some continued supply of high LTV mortgages, which of course are greatly wanted and needed by first-time buyers.
Other first-time buyer focused policies that might see the light of day include no stamp duty for first-timers at all, Help to Buy housing developments only available to first-time buyers, and more generous support within the Help to Buy ISA. However, the overarching issue – as it has been for so long – is housing supply and until we can have some serious movement here, I suspect we will be playing catch-up for many years to come.
That said, agents should be aware that this could be a much more welcoming marketplace for first-timers and that developers and builders are going to be encouraged to keep building for this demographic. That being the case, it is younger buyers who could be leading the market, and therefore agents might do well to put some serious resources into this sector.
