2020 vision: What does this year hold for the Cambridge housing market?
Anton Frost, partner at Carter Jonas, shares his view.
With Christmas seeming like a distant memory, so too does the December general election. While it was not a result that pleased all, a solid majority is just what the government needed to consolidate certainty, implement change, and generate some much-needed movement back into the housing market.
Now the time has come for promises to become policies, but what will such legislation mean for us in reality? Let’s take a look at the Conservative Party’s biggest housing priorities and how these will impact the market:
1 - Stamp duty: A surcharge in stamp duty for overseas purchasers was one of few policies found across all manifestos. Once implemented, it could generate substantial revenue and, in theory, create more opportunities for UK buyers in the marketplace. The Tories are prioritising homeowners, as opposed to providing ‘too much’ of an opportunity for overseas investors. That said, investors of this profile are more likely to buy property at the very top-end in areas like prime central London and are, to a lesser extent, competing for stock in the mainstream market.
2 - Building and redistributing homes: While Boris Johnson’s vision to build at least a million new homes in the next five years is admirable, ensuring these are built in the right areas is paramount to driving down prices and increasing affordability. While time will tell as to whether this target can be reached, much could be achieved in the interim through redistribution of existing stock. A commitment to re-energising the downsizer market could be beneficial, where there is little movement at present to unlock opportunities further down the chain.
3 - Facilitating first-time buyers: The Conservatives’ plans for longer-term mortgages to help reduce the upfront costs for budding homeowners is admirable, however, many banks offer longer-term mortgages and fixed rates already – so the success of this will boil down to what the party can offer first-time buyers in the way of added value and making genuine change.
4 - Support for tenants and landlords: Rightly so, the party has outlined its commitment to stop rogue landlords in their tracks and pave the way for a fair and affordable market for tenants by abolishing ‘no fault’ evictions and offering ‘lifetime deposits’. However, in doing so they have not grasped that penalising landlords further - and failing to separate the rogue investors from the reputable - would only lead to less stock, higher competition and increased rents.
Cambridge has and always will harbour an enduring appeal that will help retain its reputation and position as one of the strongest performers on the national property stage. That said, the last three years have brought with it waves of uncertainty and instability, which has naturally impacted transaction levels and buyer confidence. While we were not the ‘hardest hit’, momentum was nevertheless interrupted.
While we expect that the worst is over, January 31 does not mark the end of Brexit, but the beginning of the end. We have some way to go before we experience a climate reminiscent of the pre-2016 ‘golden days’ but buyers, sellers, landlords and tenants should take comfort in the fact that Cambridge has exited this political storm relatively unscathed, and now is as good a time as any to engage with the property market.
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