The property market has faced uncertainty - but there's a reason to be cheerful over house prices
Homeowners could have a lot to be happy about
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It’s easy to be downbeat when it comes to the property market. Six months on from Labour’s procession to power, the government’s plans for growth have come in for criticism in some quarters.
Many have criticised the length of time it’s going to take to see the economic benefits. This is understandable but investors will welcome them nonetheless.
The key projects, Heathrow, Doncaster Airport and the newish Silicon Valley corridor between Oxford and Cambridge, will inevitably boost property prices in those areas.
Forward-thinking investors will already be looking to gain an advantage in those areas and they won’t be put off by lengthy timespans.
Experts share there are long-term benefits for sellers just now
PAEven if a plane doesn’t take off from the third runway at Heathrow for 20 years, the plans mean there will be business confidence in those areas and the best investors think long-term.
Property professionals in particular look decades ahead, and what we will see is prices now starting to rise in the areas around these infrastructure projects.
Another positive outlook for property investors, paradoxical as it may seem, can be found in the massive rise in the population forecast by the Office for National Statistics this week: up five million over 10 years.
Assuming an average household size of 2.3 people, an additional 2.2 million households will require housing and associated local services.
A high proportion of immigrants initially rent so we are very likely to see a spike in the buy-to-let market as landlords look to cash in on the laws of supply and demand.
More good news for the long-term prospects of the property market comes in the form of reports that ministers are planning to relax rules on mortgage lending to allow people to buy who couldn’t otherwise afford to.
More people will have the money available to them in the short and medium term and, as people tend to borrow the maximum available to them, this will add to upward pressure on prices.
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Jonathan Rolande shares his opinions JONATHAN ROLANDEResearch shows that some 37 per cent of first-time buyers struggle to find the money to be able to buy. The current restriction limiting eligibility for most to 4.5 times earnings has been seen by some in the banking industry as a restriction that has been in place for too long.
Other reasons to be cheerful include future expected reductions in interest rates perhaps later this year, and the wage growth seen of late will mean property will be more affordable to more people.
Even Labour’s much-criticised imposition of VAT on private schools has resulted in property prices increasing in areas around state schools.
Change is good and the government’s new conversion to boosterism certainly provides opportunities and confidence for anyone looking to invest in property long-term.
Jonathan Rolande is a property expert from the National Association of Property Buyers
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