What changes has the property market seen over the past year?
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Outgoing president of the National Association of Estate Agents reflects on an eventful year for north London property, and considers what the future may hold.
In June 2014 when my year as head of the leading professional body for estate agents began, I was expecting a lively term of office, with a general election due the following May. However I had not imagined the year would be quite as eventful with property and the housing market becoming a major political battleground.
An issue which begun to gain more notice during the year was the law which removed the concept of ‘Caveat Emptor’ – let the buyer beware. The Consumer Protection Against Unfair Trading Regulations (CPRs) came into effect in 2008, but started affecting the property industry with the abolition of the Property Mis-description act in late 2013. This puts the onus onto the seller and agent to ensure information that may affect a potential buyer’s viewing decision must be disclosed at the outset. In simple terms, the CPRs make it an offence not only to make false claims about a property but also to omit any information that may affect the buying decision.
Another major revolution in the property market was the reform of stamp duty at the end of 2014. This removed the old inherently unfair slab structure and introduced a progressive tax based on the price paid. Up to a purchase price of £937,500 the new system has given buyers a saving, and although property over this price has seen an increase in the amount of tax paid, overall the reform has helped to boost the market nationally by unblocking previous bottlenecks which has allowed movement up the property chain and an increase in the number of transactions being completed. Locally this has allowed purchasers more disposable funds when buying below £937,500 and fuelled the continued high levels of demand throughout the area.
As the post-election dust settles people are asking what a Conservative government will mean for the housing market. Firstly and most importantly a majority government provides greater stability which in this case should mean a more settled and positive economic outlook. The key to a healthy housing market is confidence and the removal of uncertainty will provide this.
It is disappointing that the new government continues to resist the idea of licensing agents. It seems ludicrous that you could trade as a butcher one day and open the next as an estate agent. My message is that when buying or selling a property people should seek out members of the NAEA. You are then dealing with an experienced professional who adheres to a strict code of conduct.
The past year has seen an increased demand for Buy-to-Let investments, as people have more freedom to invest their own money and have been given certain freedoms relating to their pensions. Although it is inevitable that the next interest rate movement will be up, the Bank of England appears to be trying to use all its powers to control the market through other means first. It continues to achieve this via Mortgage Market Reviews ensuring the mortgage lenders consider affordability and future proofing any loans, so hopefully no rise will be seen in 2015.
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Although the Mortgage Market Review has made obtaining a mortgage more difficult, more buyers are becoming able to meet the demands of the lenders and are looking to join or move up the property ladder. I wouldn’t be surprised to see prices increase by the end of 2015 by 5-8 per cent, driven by simple supply and demand.
The confidence in the housing market is typified by the number of new developments that are being planned and coming to fruition in our area. A prime example of this is Pinnacle in N10, a new development of high quality flats and mews houses in Muswell Hill. There has been huge interest since their initial release and a number of off-plan sales have been agreed with the view that by the time the development is completed in a year their value would have increased by approximately 10 per cent.
Anyone who had been holding back because of any doubts they had over the election result and the housing market can now have the confidence to move or to take the decision to invest in property.