Mortgage lending problems, fluctuation in the value of the pound, Brexit, and now a general election all bring uncertainty to the housing market but will it actually effect us here in Cornwall?
The surprise announcement of the general election has caused a wave of media stories from good to bad but what does all this mean for the housing market? The general opinion is that across the UK currently there is a general shortage of properties coming up for sale. Add this to the fact that historically during the lead up to any election (the last one was only two years ago!) this will only get worse and activity levels will drop as we get closer to election day. Also issues such as the high cost of stamp duty have had a serious impact, not just for those existing homeowners who feel they can't afford to raise this extra money, but also of course for purchasers . especially landlords . who are having to factor in the sizable extra stamp duty charge. A shortage of property normally leads to prices rises but with a glut of hesitant buyers waiting to see who will be leading the country in the future, a stagnant market awaits us with low transaction levels.
Locally here in Cornwall I have certainly had new buyers and existing landlord clients call me since the news of the snap election to ask what it might mean for them and the impact on house prices.
Unlike London and the South East, we are certainly not seeing a glut of properties on the open market however the ratio of buyers to new properties is not high and so current demand is good without being overly stretched.
Personally while I would like to see more properties coming on for sale at realistic prices to keep that middle 'family home' market churning. Sadly the 'uncertainty principle' I suspect will mean that even more potential vendors and purchasers will be adopting a 'wait and see' attitude over the coming weeks. The early polls seem to report a strong Conservative result which will only be positive for the housing market and may even give it a boost, that being said, we all know how reliable the polls have been in previous years!
According to land registry the housing market in the South West saw housing prices rise by 0.4% in March. On an average house price in Truro of say £240,000 this is only £960, but, as a famous supermarket says 'every little helps'. A steady 2-3% a year (which is what we have seen in the last 3 years) price rise is good for the local market and in manageable for buyers, keeping transactions at a stable level.
Of course if we end up with a Liberal Democrat government and a 2nd referendum on Europe anything could happen!