After the shock of the Conservatives
returning to power with a majority at Westminster, all the potential issues and
possible uncertainties of a hung parliament has lifted the cloud from the Solihull
property market. There seems to be new
signs of life for house prices after a subdued six months.
Against the back drop of Labour’s election
promises of rent controls and three year tenancies, some Solihull buy-to-let
landlords were waiting to see how these new policies would be implemented
before they committed themselves to buying more property for their portfolio.
Now that uncertainty has been removed, the long term picture is more positive.
So, with all that uncertainty now removed,
where will prices go next? Well, with inflation
at zero and with the money markets happy that David Cameron is still at No.10,
the Bank of England has no reason to raise interest rates until 2016 at the
earliest. As mortgage rates are at their lowest levels since 2010, landlords
with large deposits will now be wooed by the mortgage companies in the coming
months with low rates.
Also, over the last few years landlords
have benefitted from a booming Solihull job market. Unemployment in the borough
has dropped to 1.2% and whilst 894 people were claiming unemployment benefit a
year ago, the figure is now around 571. With more jobs and better pay, tenants
have been given better spending power and are therefore more willing to pay for
good quality Solihull properties, pushing everything northwards.
Some landlords might be nervous about the Tory’s
plans for the housing market in the next five years in terms of demand for their
rental properties. One of those schemes (which is in the news a lot at the
moment) is for Housing Association tenants to have the ‘Right To Buy’ their
property. Tenants such as these were never in the private rented sector to
start with and therefore will actually increase the supply of properties in the
housing stock in decades to come. On the other hand, the government’s ‘Help to
Buy Scheme’ has only helped 36 (yes 36!) owners purchase a property since April
2013. Considering 2,358 properties have changed hands in the last year alone in
Solihull, I don’t think this scheme made a huge difference to our local
property market.
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