Confidence has immediately returned to the property market following the general election, according to experts.
Some housing commentators have suggested that house prices could rise as much as two per cent in 2020.
Howard Archer, chief UK economist at accounting giant EY, said the Conservatives’ win would see its previous forecast rise from about one per cent a year.
Mr Archer said record interest rates would also help the property market, although it’s unlikely there’ll be another cut anytime soon.
This translates into low mortgage rates, which will help landlords who want to add to their investment portfolios.
It follows the property market stalling during the past few months, ahead of the general election and Brexit.
Political and economic uncertainty has meant many buyers – including landlords – have been holding off on their purchases.
Landlords have been left wondering whether policies would be introduced that could harm their investments.
However, now a government has been elected, much of the uncertainty affecting the housing market has been lifted.
Mr Archer said: “Housing market activity could be given a modest lift in 2020 if the government introduces specific measures aimed at boosting the sector in the Budget.
“Low mortgage interest rates and a shortage of properties for sale should provide some support to prices.”
And Martijn van der Heijden from Habito, an online mortgage broker, said: “The Conservative Party returning to Government with a significant majority will be welcome news for some in the housing market, which has suffered from ongoing political and economic uncertainty in recent months.”
The Conservatives have said they plan to introduce a number of changes affecting landlords, including abolishing ‘no fault’ evictions.
Otherwise known as the ‘Section 21’ ban, it means landlords will have to give a concrete and evidenced reason already specified in law for bringing tenancies to an end.
Read more about the ban on ‘no fault’ evictions.
The new government also plans to encourage ‘lifetime deposits’. This would mean tenants wouldn’t have to raise a second deposit if they move, with the one deposit transferring from the previous tenancy to the new one.
Separately, energy efficiency rules that came into force last year will be extended to all existing tenancies from April next year.
Also from April 2020, landlords will no longer be able to able to claim any tax relief on their mortgage interest payments – a policy that was introduced in 2015 and phased in over four years.
However, there’s still Brexit ahead, scheduled for the end of January next year, and some decisions on housing may be delayed until then.
Schroders’ senior European economist Azad Zangana said: “The UK will now be focused on delivering the UK’s Brexit withdrawal agreement by January 31.
“Following that, it will then move on to trade negotiations with the European Union, as well as its own domestic agenda in the UK.”
How are you feeling about the new government’s plans for the buy-to-let sector? Let us know in the comments below.
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