Everybody’s talking: separating the speculation from the fact.
Ah December 2014. The end of the calendar year and a time for property experts, journalists and agents to gaze into their crystal ball and predict just what might happen in 2015. There’s so much hyperbole out there that it’s hard to separate the fiction from the fact, especially when you’re looking for some key stats or messages that you can pass on to clients.
One thing that is set in stone is the General Election. Most commentators believe the property market will effectively go ‘on hold’ before May 2015, with a blanket of ‘uncertainty’ casting a shadow over home movers. Really? Let’s look at the evidence. The Chancellor has gone all guns blazing in the run up to the election, announcing his stamp duty reform and then the Starter Home initiative. When you combine this with the ongoing Help to Buy schemes, historically low interest rates and mortgages rates hovering around 2%, the next six months are actually shaping up to be great for home buyers – including buy-to-let investors looking to expand their portfolios.
In addition, Labour – should they win – are set to radically change the private rental sector with the scrapping of tenant fees, a cap on rent rises and three year tenancies becoming the norm. It is thought, however, that tenancy arrangements agreed before the General Election will stand so just how many landlords and property managers will look to seal deals and sign up tenants before May?
How about interest rates? The Bank of England’s Mark Carney is the rhetoric king. So far he has manipulated the markets with mere talk of interest rates going up but there has actually been no budging from the 0.5% low under his tenure as Governor. If you’re advising investors purchasing buy-to-lets with mortgages, check the bank swap rates with IFAs first. It’s these rates than keep repayments and new products affordable.
And how can I blog about speculation without mentioning house prices, monthly rents and an apparent bubble about to burst? The chatter is incessant: rents are climbing, rents are falling, supply is limited, house prices are tumbling, mortgage approvals are stalling etc. It’s time to look local. Experts that come in with sweeping facts and figures are usually quoting from a national stance and none of it is applicable to agents on the high street looking after a tight geographical patch. Look at local trends, analyse your own historical data, read about news affecting your area and draw your own conclusions. If 2015 is the right time for your clients to move home or invest in a buy-to-let, and their circumstances have been verified, then that should be your guide.
* Simon Duce is the Managing Director of the ARPM Outsourced Lettings Support
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