It’s been called the ‘Boris Bounce‘. The property market surged up in January straight after the election as confidence returned to the market after the Tory part overwhelmingly won the election.
However, can this last?
Well, the majority of the transactions that went through were actually transactions that were simply already set up prior to the election. The day after the election all of these exchange/completed which in turn increased the buoyancy in the market. However, things won’t continue at this rate but we are set to see a great year in 2020 for the property market.
When you have a forward-looking government who wants to create wealth rather than take wealth you will always have a more confident investor market whether that be the stock market or the property market.
Confidence is key to investors parting with their hard earnt cash so it is important the government keeps with the positive vibes that they have been giving.
A key to how they will be perceived will be in the first budget. Will they decrease the 40% rate of tax or keep it where it is, will they give tax breaks elsewhere or increase, again all of this can affect confidence and lay the foundations of the next few years.
So the budget is one to look out for. Something else to look out for is what the bank of England is going to do with interest rates. Now although this is not something the government control, a key factor in property prices comes from the BoE rate-setting policy. If rates are low and mortgages are cheap then investors tend to invest more. As soon as mortgage rates increase dramatically then this dents investors in the pocket so they tend to leave their money in the bank.
There have been rumors of a rate cut that will push the property market on but only time will tell.
Brexit nerves seem to have dissipated for the time being and again over the next year, there will be a lot of tough negotiations with the EU on a trade deal. If this is not forthcoming we could still have a hard Brexit but I feel both sides will relent and make concessions.