Market Update

March has remained busy in both sales and lettings and, as the weather improves, the numbers of people searching for a new home is increasing.

Now is traditionally the busiest time of the year with many people looking to agree sales and purchases with a view to moving in the summer before the autumn school intake.

George Osborne delivered his fifth Budget and, perhaps understandably, there was little of direct interest to the property market although his punitive use of stamp duty on investors buying via a company “vehicle” at the very top end of the market was strengthened by reducing the level to £500,000 from £2m. This largely affects overseas buyers in Central London who see the UK as a safe haven for their money.

Most people will benefit from the increase in personal allowances and the usual subjects of tax increases such as beer and spirits were frozen or reduced. Tobacco duty was increased by 2% above inflation.

The Help 2 Buy scheme for new homes was extended until 2020 and it is hoped that this will encourage the building of more new homes to help balance the currently unbalanced supply and demand equation.

The most interesting news was that affecting pensions, in that control of individual pensions will rest with the pension holder who will be able to decide how to use their pension pot themselves. Up until now it has been the norm to buy an annuity for life with the contents of one’s pension pot and have a guaranteed income. It will now be possible to invest in other forms of savings and investment or spend the money as one sees fit.

It is possible that this move will see an improvement in annuity interest rates as insurance companies compete for our money and therefore pensioners will get a better income and it may also see some invest in buy to let or other investments with the money from their pension pot.

This policy announcement has to go through various hoops and consultations but is a radical and potentially exciting development.

Overall the budget reflected the growing confidence in the economy and, whilst keeping a tight rein on the UK plc purse, was encouraging. With a general Election in 2015, the Chancellor will be hoping to be able to deliver a more “voter friendly” Budget next spring.

There was certainly nothing in the Budget to dampen the enthusiasm apparent in today’s market and the stability of low interest rates looks assured for the foreseeable future.

With property prices rising, it is vital that sellers obtain an accurate valuation of their home. With our many years of experience and success, we shall be pleased to advise.

The lettings market is also strong although the emphasis from landlords is in securing and maintaining long term tenancies from quality tenants rather than squeezing the last pound out of the rent.

As property prices increase, yields as a percentage are falling but, the capital value is adding to the value of the investment.

Quality tenants are looking for well maintained, well managed property and are prepared to pay good rents to secure.

Again, our experienced team will be pleased to advise.

Finally, with the spring flowers adding to the “feel good” factor, now is a great time to be moving.

Yours

Peter Lawrence