Home in on big hous­ing boom

Macclesfield Express - - HOMES -

JOHN Hal­man is man­ag­ing direc­tor of Gas­coigne Hal­man, an es­tate agent with 18 of­fices in south Manch­ester, and is the North West re­gional res­i­den­tial spokesman for the Royal In­sti­tu­tion of Char­tered Sur­vey­ors. Here he dis­cusses the im­pli­ca­tions last week’s gen­eral elec­tion is likely to have on the prop­erty mar­ket. Guided by the na­tional opin­ion polls I had pre­pared for this re­view of the hous­ing mar­ket in the an­tic­i­pa­tion of a hung par­lia­ment, with the dis­tinct pos­si­bil­ity of a man­sion tax to­gether with new dra­co­nian rules for the pri­vate rental sec­tor.

In­stead, the elec­tion pro­duced a re­sult that sur­prised even a re­cu­per­at­ing Nick Robin­son, with David Cameron be­ing re­turned to No.10.

Is this likely to af­fect the prop­erty mar­ket in our re­gion and, if so, in what way? In the run-up to the elec­tion all of our of­fices in south Manch­ester and north Cheshire have re­ported high lev­els of view­ers and strong sales.

This ac­tiv­ity is a re­sult of the rel­a­tively high level of pros­per­ity in our im­me­di­ate re­gion and the at­trac­tive rates of in­ter­est be­ing of­fered on mort­gages. Fur­ther con­fi­dence has also been pro­vided by base rates which are an­tic­i­pated to re­main at the cur­rent level of 0.5 per cent for at least the re­main­der of this year.

Many peo­ple think that now is a good time to buy and this has been re­flected in high lev­els of ac­tiv­ity and sale prices which have been ris­ing in all of the more popular ar­eas for prop­er­ties in lower and mid-price bands.

At least part of this ac­tiv­ity has been stim­u­lated by the buy-to-let mar­ket with rents ris­ing. Yields of five per cent are not un­com­mon, and when linked to cap­i­tal ap­pre­ci­a­tion this has pro­duced an un­der­stand­able in­crease in ac­tiv­ity with land­lords ex­tend­ing their port­fo­lios.

The one area of the mar­ket, how­ever, that has not ex­pe­ri­enced high lev­els of ac­tiv­ity is the mid to higher mar­ket. The price level at which this kicks in dif­fers from lo­cal mar­ket to lo­cal mar­ket – but nev­er­the­less there has been a pro­found ef­fect on this mar­ket by the prom­ise of a man­sion tax by both the Labour and Lib­eral Demo­crat par­ties.

This has damp­ened de­mand and brought a cau­tious ap­proach from pur­chasers fear­ing a big­ger house will sig­nif­i­cantly in­crease their per­sonal tax bur­den.

This elec­tion re­moves that risk and we be­lieve will re­sult in greater lev­els of ac­tiv­ity in the mid to higher mar­ket over the course of the next par­lia­ment. This will come as a wel­come re­lief to many parts of our re­gion. While the pri­vate sec­tor rental mar­ket is likely to con­tinue to be ac­tive, we would en­cour­age the Gov­ern­ment to look care­fully at the con­trols in this sec­tor where greater pro­tec­tion is re­quired for land­lords and ten­ants.

We, like the ma­jor­ity of our rep­utable com­peti­tors, have pro­fes­sional bod­ies with rules that en­sure we ad­here to strict guide­lines re­lat­ing to clients’ money, but the same can­not be said for the in­dus­try as a whole and there con­tin­ues to be sto­ries of abuse up and down the coun­try.

Prior to the elec­tion each of the po­lit­i­cal par­ties made sig­nif­i­cant prom­ises re­lat­ing to the num­ber of new house starts that would take place if they were in Gov­ern­ment.

The one com­mon de­nom­i­na­tor of all of th­ese state­ments was that they were wildly higher than has been achieved dur­ing the last decade and we ques­tion whether, with the cur­rent plan­ning pol­icy frame­work, we can ever build suf­fi­cient houses to sat­isfy our grow­ing pop­u­la­tion. In th­ese cir­cum­stances de­mand out­strips sup­ply both in the rental sec­tor and also in the house sales mar­ket with the in­evitable con­se­quence of in­creased prices and in­creased rents. With­out a sig­nif­i­cant in­crease in the hous­ing sup­ply we can only see an ex­ten­sion of this trend over the next few years.

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