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James Baker, Partner and Totnes office manager, comments on the property market and what we should expect following the General Election this month.
Following Labour’s election victory and the return of political stability, we anticipate improving confidence in the property market over the coming months.
In its manifesto, Labour had made it clear that initiatives to support the property market in the UK would form a key part of its agenda in government.
Labour intends to prioritise the maintenance of current Stamp Duty exemptions for first-time buyers; however, these are set to expire next April which could create uncertainties. If the Government does not extend the timescales beyond April, first-time buyers could face significant tax increases. Whatever it decides, the new Government must provide time to prepare for change, rather than springing last-minute announcements.
There may also be significant changes in the UK's housing landscape, as we understand that their vision is an ambitious plan to build 1.5 million homes and to reform the planning rules.
We may of course not know for a little while which policies will be implemented, and therefore what may be of more pertinent news, is the predicted reduction in the base rate by the Bank of England. The Monetary Policy Committee next meet on 1st August to decide what level interest rates should be set at. The market is already pricing in a base rate reduction to sub 5% by October 2024, however we all hope that the first cut will be next month. A common expectation seems to be that the base rate is predicted to fall below 4.75% by the end of 2025.
Therefore, the property market is likely to see confidence rallying over the summer and we predict the usual peak of housing activity in the traditionally strong September and October markets, with buyers hoping to complete on property purchases before Christmas. This would not have been the case if the General Election had been drawn out until November.
For those selling property, that wish to exchange and complete this year, it is now more important than ever to ensure that your agent and solicitor have all the relevant paperwork ready. Research by Propertymark found that while 78% of sales progressed from offer to exchange within 12 weeks in March 2016, this dropped to 29% in March 2024. Extra paperwork, poorly-resourced solicitors and a lack of upfront material information have all been cited as factors contributing to delays in property transactions. The industry standard of time taken between an agreed sale and exchanging contracts is now 16 weeks, so buyers will need to act quickly if they do wish to be in their new purchase before Christmas.
Considering a move and want to know more? Contact your local office to speak with one of our knowledgeable experts.
