Paul Twyneham Estate Agents in Warwickshire - Property for sale

CONSIDER SOME KEY AREAS OF THE PROPERTY MARKET FOR THE YEAR AHEAD - REGARDLESS OF WHICH PARTY WINS THE GENERAL ELECTION

Over the years we have seen a slight lull in market activity in the lead up to a general election and this one seems no different. But whoever wins the election, it is hard to see how one party will have more of an impact on the market over another. Despite the deafening silence from all political parties on the need for higher taxes, we all seem to be resigned to rising costs and this will inevitably have some impact over the next few years. But mortgage borrowing is getting easier, and, for those on the move, there are some pre and post election points to bear in mind in all price ranges.

First Time Buyers
Buyers in the more costly parts of the country will now benefit from the £250,000 stamp duty holiday that came into effect after the Budget. However, their ability to capitalise on this relief will, to some extent, lie in the hands of the lenders. Harsh lending restrictions will have to be relaxed still further for there to be across-the-board benefit. Also the First Time Buyer appellation does not extend to couples where one party has previously owned property. The government suggests that nine out of ten first time buyers will benefit from this move. But estate agents mainly disagree with this figure as so many buyers in the lower end of the market now result from distressed financial circumstances following the recession, or broken personal relationships. But, all-in-all, with interest rates still at their lowest for decades, it is a good time to be making that first move.

Middle incomers
For middle-incomers the jury is out. Will there be a trend to stay put or to downsize in anticipation of greater taxes, higher interest rates and increasing living and education costs over the next few years? Or will members of this group move across market into more fuel-efficient eco-friendly homes, or into suitable state school catchment areas? Will there be a backlash against ever-rising council tax bills and a move into cheaper areas? But, whether buyers move up or down market, there will be movement boosted by first time buyers setting up a chain reaction.

The £1 Million Club
Those who wish to move into the £1m+ club bracket should clearly do so before April 2011 when the 5 per cent Stamp Duty levy comes into effect. Although there will be some regional exceptions, overall prices could remain relatively static over the next year in this sector. So expect some last minute price reductions next year before the Stamp Duty rise. Many more homes will be priced just under the £1 million mark. This will offer some fine opportunities for those skilled at brinkmanship. However, the cost of missing a completion deadline could be high.

Retirees
With an aging population, this group can only grow ever larger. Watch out for developers creating more homes geared to active retirees who will be downsizing from larger family homes to release capital. But what will the market for selling be like for these newly retireds? With rising interest rates younger middle-incomers could become nervous about overstretching themselves with higher mortgages, especially in the precarious career environment of today. Their world is very different from many fortunate parents who rode the wave of post-war prosperity, a job for life, a well-funded welfare state and index-linked final salary pension. Will this have an impact on prices in the middle market? Last year’s surprising lift in prices was largely down to a lack of stock. How will the market react to greater inventory? Some suspect this could be the dreaded second bounce. If so there will be some excellent opportunities for buyers.

Home Information Packs
Perhaps one area of the market that may well be changed following the election is Home Information Packs. The Tories have pledged to abolish them. This largely ridiculous piece of costly and ineffective legislation has few supporters. However, abolition is not expected immediately as the Conservatives may look at a voluntary arrangement that rescues the few effective time saving parts of HIPs that do work, namely title and local searches. But above all abolition would end, what is in effect, government permission to put one’s property on the market and paying an extra tax to do so. Few will mourn the end of HIPs if it comes.

Overall there is now much more property on the market than last year and many more buyers – or at least, lookers. This suggests that, for a while, we may see a level market with prices steady and neither buyers nor sellers having a clear advantage. This points strongly to a bottoming out of this property market cycle and from there, regardless of which party is in power, the inevitable way is up!