JAMES WATTS

James Watts
Why a strong May majority is good for property
8 May 2017

While weaker sterling is highly annoying for any Brits planning their summer holidays, dollar-based buyers are not shedding any tears. Many plan to take advantage of our weaker currency, particularly as it has started to strengthen against the dollar on the back of Prime Minister Theresa May calling a surprise General Election. Those who have been watching the currency play to see just how low sterling could go, may now need to make their move before it strengthens too much, although the weekly vitriol between Brussels and London will do anything but provide a stable picture for markets going forward.

Those Americans who are thinking that they should take advantage of the weaker pound and buy now need to be property-led and adopt a longer-term view. If you are looking to flip the property in the next two years, buying may not be a good idea in the absence of any likely price inflation, but if you are planning on being in London for ten years, forecasts are cautiously optimistic.

At the end of last year and the beginning of this one, we saw many people preferring to hedge their bets by paying high rents rather than buying property. But this imbalance seems to be changing slowly, with buying more firmly on the agenda for some. Could this be a sign that we are at the bottom of the market? Some are saying so, but we think this is still premature – that said, it does seem that the speed of contraction has slowed, albeit with acutely low stock levels to use as guidance. If people are prepared to take a longer-term view they may be able to take advantage of what remains a buyers’ market, albeit in an environment with limited choice.

While we don’t have a crystal ball, the polls seem to indicate that May will win the election with a strong mandate, which will bring back confidence to the housing market. People will be happier to invest in property if sentiment is good and it will quell uncertainty.

The real issue buyers face is the shortage of stock as those who don’t really need to sell are not going to do so now. On the one hand there is plenty of opportunity for the buyer but on the flip side, you have to find the right property, which is where a good buying agent can help.

 

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