Will the UK Housing Bubble Burst in 2017? What you should know!
The fascinating and portentous political events throughout the latter part of 2016 and the earlier half of 2017 may have considerable effects nation-wide in terms of property. Up until now, unregulated and uncapped private rental prices as well as the rocketing costs of property for sale have resulted in a substantial housing bubble – lately reported to be weighing in at over eight trillion pounds. Now the UK has taken the wider world by surprise by opting for Brexit – a choice to leave the European Union that continues to inspire uncertainty in terms of our position within trade circles and our appeal to international property investors. The value of the pound has fallen, and many of those who, before Brexit, were working towards selling their old home or buying a new one, may now decide to hang fire until they are able to fully ascertain what effect their nation’s big decision will have on their finances when it comes to their move.
Now, in the summer of 2017, we have witnessed yet another entanglement that has the potential to provoke further questions and concerns for those looking to make important property-based choices. The recent snap-election, announced earlier this year by Prime Minister Theresa May, ended in a hereto unpredicted loss of majority for the Conservative Party, resulting in a hung parliament. While the party in power managed to cling to their position with help from a “confidence and supply” agreement with Northern Ireland’s Democratic Unionist Party, things still look shaky in terms of our country’s leadership, and, in times such as these, it is often the case that something has to give. As a result of the pound falling – and, by a direct correlation in some cases, a lack of confidence in our current minority government – it is possible that overseas investors will spend their money elsewhere, landlords might be more at the mercy of their tenants’ rent-paying abilities than ever before, and house prices could finally take a downward turn, perhaps leading to a housing market crash.
In fact, one suggested eventuality of this struggling minority government is a second snap election, with a real possibility that the Labour Party, with Jeremy Corbyn as its front man, may just fight their way into power and implement their proposed policy of placing an inflation cap on rent increases. It is also very likely that they will attempt to revive a proposed amendment to the last government’s housing and planning bill which stated that rented homes should all be “fit for human habitation”. The quality and safety of rented accommodated has been called into question under tragic circumstances recently, following the terrible events at Grenfell Tower in London. As a result of this, landlords would be required by law to spend more money on the upkeep and improvement of their properties.
With all this in mind, we should be prepared for major changes to the UK property market over the coming year. Will house prices fall? No one really knows what the future may bring. If you would like to talk to one of A1 Homebuyers’ property specialists regarding your concerns about buying or selling your home, call us today on 0345 055 8468 and we will be more than happy to advise you.