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ashes to ashes dust to dust , the property / housing market 2016 ?

What will happen to the property market in 2016?

The property market will have rather more on its plate in 2016 than the perennial issue of whether house prices will go up or down.

The recent decision of the US central bank, the Federal Reserve, to raise interest rates for the first time since the summer of 2006, has opened the door for the Bank of England finally to follow suit.
And one thing that will certainly happen in England and Wales is that from April, stamp duty rates will be jacked up for anyone buying a home that is not their main residence.
A similar change will happen in Scotland.

That will make things more expensive for second-home buyers and buy-to-let landlords, and deter some potential buyers altogether.

So, after a few years in which the the mortgage tap has been turned back on and sales have revived, the property market is in line to receive some jolts.

Hard times for landlords

Who would have guessed that a Conservative government would take a dim view of buy-to-let landlords, just the sort of people supposed to be staunch Tory voters?

Renting in the UK - a history Buy to Let Landlords @onthemarketblog 

But that is exactly what has happened.
Not only will their stamp duty rates rise, but an erosion of some of their tax privileges is now in the pipeline for 2017, after an announcement in the Chancellor's summer Budget.Which will effectively change, foreign buying habits

Also, the Bank of England wants the power to limit overall lending to buy-to-let borrowers, something to which the Chancellor will almost certainly agree.

The economic and political problem, as the government sees it, is that the rise of private landlordism has crowded out home owners, especially the fabled first-time buyers.

"The government is very motivated to reverse the trend in owner-occupation - this is now a very important part of the government's housing strategy," says Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors (Rics).

"Buy-to-let landlords have had a very good run - holding property has been a very lucrative investment, so if the government has to squeeze the buy-to-let landlord it will take that in its stride."

'Frightening prospect' ?

it is surprising, current and would-be landlords are now feeling a bit beleaguered as many key point indicators , were all heading to what is happening within the landlord industry now . they were all warned. 

"It's  NOT an extraordinary about-turn for landlords," says @onthemarketblog the buytolet king and queen sold off  their property portfolio in  December 2015 last year and Bank of England  continued to voice concerns all through the later part of 2015 ,with the rise in buy to let mortgage approvals since September 2015 add to the chancellors autumn statement on stamp duty , Brandon Lewis MP bringing in tougher legislation for landlords , in the historic housing and planning bill.

Rents will be going up in 2016 but not high enough to to compensate for the increase in stamp duty , house prices are likely to fall . 

Naturally have a go and amateur landlords will be out of the business , once they start having to obey the tenants right to rent rules on 1 February which are aimed at illegal immigrants.

Under these rules, landlords will have to check, as well as a  £3,000 fine, that their tenants have the right to rent in the UK.Many landlords are finding this no brainier and so will quit the industry as the new profit margin due to new taxes , in particularity landlord franchises .

The Council of Mortgage Lenders (CML) forecasts that the number of new loans made to landlords will now fall sharply, from 116,000 in 2015 to just 90,000 in 2017.

Will mortgage rates rise at last?

It is almost seven years since the Bank of England slashed interest rates to a record low of just 0.5%.

That was the end point of a series of emergency cuts, designed to stave off financial Armageddon in the wake of the great banking crisis.

Since then, most economists have persistently forecast that rates would start rising again, probably within 18 months.
Every year these forecasts have been wrong, so will 2016 be any different?

For its part, the Bank of England continues to sit on the fence, effectively saying "wait and see".

Most independent economists think the first UK rate rises since July 2007 will at last happen this coming year, and by two increments of 0.25% each.

One forecaster, Ed Stansfield at Capital Economics, explains why: "The economy is probably a little bit healthier than the collective wisdom of the Bank's Monetary Policy Committee thinks."

"We think that one of the things that will convince the Bank to act is continued signs that incomes are recovering."

And that growth in incomes will help avoid a collective shudder going through the country if rates do indeed rise by, say, 0.5%.

As a ready-reckoner from the CML points out, such an increase in mortgage rates, for someone with a £100,000 loan currently charged at 3.22%, would add just £26 to their monthly outgoings.
+onthemarket blog  prediction wait and see

  • buytolet industry sell off
  • stamp duty rate hike/ 2017 tax privileges  
  • cost effective fixed fee-online estate agent 
  • tougher landlord legislation 
  • lack off housing stock / construction
  • currency wars/ sterling 
  • inflation
  • Asian Markets
  • EU referendum

[many head winds, uncharted seas, in all directions, with no clear compass direction at the moment] 

ONS 2015 total house sales 1.22 m
ONS 2014 total house sales 1.4 m 
ONS 2013 total house sales 932 K

oh look The Property Industry..  Expert

Choppy times ahead

For several years now, the low Bank rate has translated into historically very low mortgage rates, making even very large mortgages appear affordable.
More recently, house prices and sales have been buoyed up by the government's Help-to-Buy schemes.

These have meant that tens of thousands of people, mainly first-time buyers, have been lent money to buy a home when they might otherwise have been locked out.

And the steady growth of the economy, with rising employment and a continuation of the modest increases in incomes, should stop sales or prices falling.

But one leading commentator, Ray Boulger of the mortgage brokers John Charcol, predicts some turbulence in the early months of 2016.
He reckons that some people will rush to purchase buy-to-let properties before the higher stamp duty rates take effect.

"Those people who want buy-to-let properties are clearly going to be incentivised to complete before 31 March," he says.

"Till then I think we will see some quite strong growth in prices, then I expect to see prices falling for the next few months as that element of demand is taken out of the market."

Reality Check -High Street Estate Agents days numbered 

We all know the rise in competition and reduced profit margins, tightening business budgets, growing public awareness of online fixed fee ,will also incentivise landlords home owners tenants to use online estate agents.

Finally Research shows that  Almost twice as many brits believe that property makes better use of cash then isa , pensions stock , shares ,premium bonds 

RIP David Bowie 1947- 2016

Bowie has successfully amassed a £400m fortune from touring over the years despite ‘weakness for sales in recorded music’ and the boom in online downloads and piracy in the last 16 years.

The singer had predicted this in 2002 when he told the New York Times: ‘The absolute transformation of everything that we ever thought about music will take place within ten years, and nothing is going to be able to stop it.

He added: ‘Music itself is going to become like running water or electricity.

‘So it’s like, just take advantage of these last few years because none of this is ever going to happen again. You’d better be prepared for doing a lot of touring because that’s really the only unique situation that’s going to be left.
‘It’s terribly exciting. But on the other hand it doesn’t matter if you think it’s exciting or not; it’s what’s going to happen.’