With 2019 now off to a chilly start, it’s understandable that people will be looking ahead to the coming year and wondering what it will bring. Property investors will be especially interested in what 2019 is likely to bring for the UK property market so here are three factors which are likely to influence it and what they could mean.
As has already been widely commented, Brexit is now, literally, only a couple of months away and, at time of writing, its form has yet to be finalized, but currently a hard Brexit is looking increasingly likely and as a minimum it is very definitely odds on that there will be some level of disruption to the UK economy in general and to the UK housing market in particular.
At the very least, it seems reasonable to assume that there will be a reduction in transaction volume while people digest the situation and work out what it means for them. This could actually lead to an upsurge in demand for rental property as people hold off buying (and possibly even sell property they already own) so they can keep their options open until they have a clearer idea what the future will bring.
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The Help to Buy Scheme
Watching the reporting around the Help to Buy scheme has been interesting. Back in 2013, the David Cameron government touted the scheme as a sign that they were responding to voter concerns about housing but even then it was subject to heavy criticism some practical (concerns over the fact that it only applied to new-build property from approved developers) and some ideological (tax money is supposed to be used for purposes which benefit everyone).
Be that as it may, the scheme was most certainly used and the government has confirmed that it will be extended through to 2023. It will be interesting to see if the target group of home-buyers continues to be as enthusiastic about the scheme now that the first batch of equity loans is liable for interest payments, thus highlighting the fact that, whether or not you agree with the scheme, it is definitely not a straightforward “free lunch”.
When the topic of the housing market is discussed, there are two popular images which come up time and again. The first is that is that of the young adult looking to “get on the housing ladder” and the second is that of the young couple looking to buy a larger home so they can start a family. There is currently much less publicity given to older people looking for suitable retirement accommodation, but this is starting to change and needs to change if the UK is to have a housing market which actually works for everyone. While student property has long been of interest to investors for obvious reasons, forward-thinking investors may want to “get ahead” of the demographic curve and look at the options for tapping into the “silver market”, especially since dedicated retirement homes are likely to be treated as commercial property and thus avoid the political issues seen in the residential rental market.