An Autumn statement, party reshuffle, and general election – what it all means for the property market

It’s official, the economy is doing better than we thought. Some of our leading pessimists were proven wrong. The ONS has admitted its previous assumptions on our collective growth were too bleak.?

In recently revised figures, the ONS acknowledged our GDP grew by 0.6% above pre-pandemic levels in the final quarter of 2021. Previously, it said the economy was 1.2% smaller than its pre-lockdown size at the time.?

The reason this matters is because the UK was dubbed the only G7 country that failed to recover from Covid-19. Imagine what this did for our collective confidence. Property investors are unlikely to be inspired to act in the only G7 economy not to bounce back. When in actuality, growth in the UK outpaced that of Germany’s, France’s, Italy’s, and Japan’s between Q4 2019 and Q4 2021.?

Hopefully, this news and renewed optimism will filter its way through to the property market. Though of course, there’s only so much we can glean from the past. Investors and homeowners will likely be much more interested in what’s coming in the future.?

While we can never know for sure what’s on the horizon, a few recent announcements have given us a few key areas to focus on.?

The public sector has been busy

In the public sphere, there’s been many news items worth paying attention to. Jeremy Hunt, our current Chancellor, said we may experience a “blip” increase in inflation this month. But we’re still on track to see it halved by the end of 2023.?

Also, it’s been confirmed he will deliver the Autumn statement on 22 November. Let’s hope there are some positive announcements for long-suffering property investors, homeowners, and landlords.?

Meanwhile, Michael Gove, the Housing Minister, laid out plans to loosen river pollution rules to boost housebuilding efforts. Additionally, he warned against environmental rules which he said risked provoking a populist backlash, while also expressing “worry” about the UK’s widening wealth inequalities.?

How these plans and fears pan out remains to be seen. It needs to be remembered that Mr. Gove has changed direction on many housing plans in recent months. Examples include the government’s commitment to building 300,000 homes a year, and student let reforms. What’s more, we’re all still awaiting clarity from the Renters Reform Bill.?

On the opposite benches, Labour have also been plenty busy. Angela Rayner has been appointed Shadow Levelling Up Secretary in a reshuffle, adding housing into her remit. We’ll have to see what this means for the property world, but we can somewhat gauge her potential priorities.?

Ms. Rayner has described herself as “quite hardline” on law and order. She is also relatively relaxed about people becoming “filthy rich, so long as they pay their taxes.” It’s worth paying attention to these beliefs, given public sentiment on who will win at the next general election. Which could be as early as Spring 2024.

Can everyone be pleased?

Regardless of who oversees housing, they’ll have their hands full. The property market is facing challenges from all angles, and there’s no shortage of people calling for intervention.

Costs are still high, prices are subdued, and many landlords are selling up. But, there are also positives out there. DeVere Group believes home sales could rebound next year. Meanwhile, rents are rising, and healthy yields can still be found across the UK.?

To push the market towards better times, the powers that be will need to offer support. A balancing act is needed though. Both property investors and tenants are struggling, but both want different things from the state and regulators.?

Independent research we produced in Q2 2023 revealed how homeowners, landlords, and multiple property owners believed the market was coping. The results showed only 21% felt the government was doing enough to combat the housing crisis, while a mere 28% thought enough was being done to support people with mortgages. Also, the vast majority wanted reforms on stamp duty, inheritance tax, and other taxes.?

Additional research we produced in late 2022 explored the relationship between tenants and their landlords. Here’s where conflicts may arise. The majority (73%) of tenants believe the rental market needs tighter regulation, while 74% believe more needs to be done to improve rental property standards, and 77% want more price controls.?

But, the same research showed 63% of the surveyed landlords felt the government had already introduced too much regulation in the private rental sector. Also, 65% believed the government had unfairly penalised and targeted landlords with different reforms over the past decade.?

Setting the property market straight will be difficult for whoever is at the helm. Even with a stronger-than-expected economy. We wish the best of luck to whoever is fortunate enough to be in charge of housing over the coming years!