Category: property market

Surveyors forecast higher property sales in the post-election landscape, which is good news for landlords in the private rental sector.

A number of property surveyors have been surveyed (aptly enough) about their predictions for the housing market in the coming months. Despite uncertainty surrounding the election results, a large portion of those questioned at the Royal Institution of Chartered Surveyors said that they anticipate economic recovery. 

This shows a more broadly positive sentiment on the topic compared to previous months. 

Last month, uncertainty surrounding the outcome of the election was higher, but now that Labour have successfully secured power with a landslide majority, it seems that industry professionals have more confidence in their predictions.

Why are they feeling positive?

The housing industry has been a huge focus of Labour’s election campaign. Not all of Labour’s proposed reforms have been glowingly received by landlords, but the party’s overall dedication to improving the housing crisis could yield some positive results. Considering that no house building targets have been met in the past few decades, many in the industry may not be so optimistic. 

Widespread reforms to property law can be a scary prospect, especially if they are implemented without enough care and attention. Landlords were particularly concerned about the major political parties’ opposition to Section 21. 

However, since their victory, Labour have rolled back their deadline for abolishing Section 21, indicating that they are implementing more realistic strategies when planning their reform policies.  

There has been tentative hope expressed about the appointment of Matthew Pennycook as Labour’s Housing Minister because he possesses the necessary level of experience in the private rental sector to tackle the housing crisis with a sensible degree of caution. 

Though their chances of victory were low compared to previous elections, the Conservatives could not be entirely discounted in the election. It’s hard to infer how the surveyors would have responded in the event of a Conservative victory.

Interest rate activity

Some lenders have dropped mortgage rates for newer businesses, but there has yet to be widespread drop in buy to let rates.

Economic news outlets have predicted that the Bank of England may cut the Base Rate as part of the August vote, though this has been held at 5.25% since last year and these predictions are not guaranteed. There is a high probability that the Base Rate will remain the same.

Many of the RICS surveyors contacted have already experienced an uptick in tenant demand for all kinds of properties. Significant percentages of these surveyors foresee rental prices rising over the next three months. 

In contrast, banking groups have reported a slowdown in mortgage spending, as well as spending in areas related to housing upkeep. 

A surprisingly influential factor contributing to this is the UK’s atrocious summer weather, as few people seem to be interested in sprucing up their homes while the clouds continue to roll in. 

Whether you’re inclined to see the glass as half-full or half-empty, it looks to be an exciting time for the property sector. All eyes will be on the Labour government’s forthcoming plans to address the most important topics such as inflation, the housing crisis and property law reforms.