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Squeezed activity shows why we should be grateful for new PM

What a month it has been. By the time you read this, we'll have a new Prime Minister, a new Cabinet, and approximately 20 more attempts to get rid of Jeremy Corbyn as Labour leader, all no doubt destined to fail. 

To say it has been a tumultuous time recently would be perhaps the understatement of the year.

As far as the property market is concerned, and all us stakeholders in it, there has been much to ponder and not least a great deal of brow-furrowing about what the future might look like. 

One thing is certain, the market of six months ago seems like a very distant memory and we are (at the moment) still treading water in terms of how matters might pan out.  

Whether the pre-Referendum commentators who only saw negativity for the property market in the event of a vote to Leave are to be proved correct waits to be seen, but I can think we can all sense change is in the air.

So, what happens next? 

Well, according to Theresa May ‘Brexit means Brexit’ and therefore the negotiations to leave will begin at some point. 

This, undoubtedly, will dominate the next few years at the least, possibly longer, because (quite frankly) we are still utterly clueless about the type of relationship the UK will have (indeed wants to have) with the EU and the impact of that decision. 

I do not envy Theresa May’s job throughout the course of the next Parliament and that’s without trying to bring the various strands of her party together.

Do we have any clues about how May will look at the housing market? 

Well, in her recent Birmingham speech she mentioned the importance of getting more houses built to tackle “the housing deficit” and talked about making it easier for “young people” to get on the housing ladder. 

Of course, this has been a stated priority for the Government over the last six years but we still find ourselves woefully short of the holy grail namely 250,000 new homes being built each year, with the likelihood this is simply unattainable. 

Schemes like Help to Buy have helped but they are not necessarily just for first-time buyers – whether these schemes are extended or not, and given Mrs May’s pronouncements, it’s hard not to think we will have more focus on helping first-time buyers and, dare I say it, perhaps more anti-landlord/buy-to-let rules and regulations in order to deliver this. 

This is despite the fact that the first-time buyer versus buy-to-let landlord ‘competition’ is pretty much a myth, and unless you start focusing on helping first-timers secure the necessary deposit amount, and having access to high LTV lending, then you are effectively barking up the wrong tree.

That said, you might like to forewarn your buy-to-let clients that the environment is unlikely to move back in their favour anytime soon, however I would hope that even with the introduction next year of the mortgage interest tax relief changes there will still be a demand for private rental sector property, in terms of purchase and tenancy. 

Indeed, I might add that the next PM would be wise to acknowledge how important the PRS is in breaching the housing gap simply because of the lack of new supply and the obstacles that have to be overcome to purchase. 

Not forgetting of course that many people choose to rent – a point that is often overlooked.

Anecdotally it’s obvious that purchase demand is holding up however activity levels have been squeezed. That was rather obvious given the Referendum result and the uncertainty it has engendered. 

It’s the very reason why we should be thankful we’re not waiting nine weeks for a new Prime Minister, and why we will all want to hear the Brexit plan as soon as possible. 

Scotland, of course, remains a very different story where their ambition for ‘Remain to mean Remain’ probably means a second independence referendum in the not too distant future.

All in all, I’m afraid at the moment we are short on detail, across any number of issues and areas. 

As the Prime Minister settles in, we should hopefully receive more detail and certainty on how events might play out – importantly the Bank of England appears to have a steady hand on the tiller and we can all be grateful for this. 

If Theresa May does look at the housing market, then I suspect builders and developers will be happy, and perhaps some of the anticipated extra activity will trickle down to us ‘lowly’ agents and conveyancers. We can but hope.

*Eddie Goldsmith is Chairman of the Conveyancing Association

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