This March property expert David Leake, of Housesetc casts his experienced eye over the local market, and predicts the year ahead facing both renters and buyers in 2016.
This year we will see a continuing struggle for those trying to get onto the property ladder, with prices further beyond the reach of low to middle earners and rent costs eating away at more of their income.
It is important that first-time-buyers (FTBs) remain at the top of the Government’s agenda in order to help them get a foot on the housing ladder. However, if the supply, specifically of ‘affordable housing’, doesn’t significantly increase in 2016, FTBs will continue to feel driven out of the market. Supply is a key issue; if we truly want to see FTBs able to buy their first home we absolutely have to address this. Osborne’s announcement that he’ll be building 200,000 new-starter-homes is a good place to start, but it’s not enough to solve the worsening crisis. We are at risk of doing too little too late. We are still waiting to see new homes being built; and whilst we wait, house prices continue to rise.
Bad news for rogue landlords
The good news is that regulation in the industry looks like it will be tightening up in 2016. I for one hope that the provisions of the Housing and Planning Bill – when brought into force – will give enforcing bodies and the courts more teeth in tackling rogue and criminal landlords and agents. This will develop in 2016 to enforce harsher penalties for landlords and unregulated agents who don’t comply with basic laws.
Rising cost of renting
Unfortunately for renters, rent prices are likely to go up in 2016. There are various pieces of legislation coming into play in 2016 which will result in increased compliance costs for landlords, and as a result push up rents for tenants. The Government needs to re-think its proposals around reducing Mortgage Interest Relief, scrapping the Wear and Tear Allowance and hiking up Stamp Duty by three per cent on buy-to-let properties. Whilst these remain, the Government’s goal of increasing the percentage of people in home ownership is getting further out of reach. The issue of supply and demand in the rental market will be increasingly pushed to its limit with rising demand outstripping supply.