Election Electricity

M2P Weekly

Welcome to M2P’s Newsletter. These weeklies will include topics and items of interest for current or aspiring Property Investors, as well as for the organisations we work with. We also post different things on Social Media daily. Follow us on Facebook here.

On Thursday the UK will elect it’s next government, so in this newsletter we’re going to look at the current state of the economy and housing market – to get a snapshot to frame our thinking whichever party comes to power.

Election Day Intentions. A significant portion of landlords (30.8%) and tenants (32.5%) are still on the fence about which party to support in the upcoming election. Among decided landlords, 25.9% favour the Conservative Party – despite disappointment in Sunak’s government – with Labour (15.3%) and Reform UK (14.4%) following closely. In contrast, only 5.3% of tenants indicated they would vote for the Conservatives, while the majority prefer the Labour Party (37.8%) (OpenRent).

Would-be buyers with a 5% deposit pay £300 more monthly in mortgage repayments than renting, says Hamptons. Mortgage rates need to fall to around 4.2% for parity (Note: not going to happen anytime soon in our opinion). In London, it costs £775 more monthly to buy. Renting remains more cost-effective in these cases.

Will rents rise after the election? Rent prices tend to rise by 1.96% in the 12 months following a General Election, with a 0.9% higher increase under Labour governments. House prices rise by 2.3% after elections ending in a majority compared to 1.4% after a hung parliament. (Compare My Move). Of course, these are just historical averages and don’t necessarily indicate causation.

House Prices showing some early signs of recovery following the silent property crash, however significant downward (and upward) pressures remain.

*Frenzied debate alert* Are you better off buying or renting? It can be a harder question to answer than you think, and very much depends on your circumstances and especially on your location and frequency of moving. This handy calculator helps you decide whether you may be better off one way or the other. With the market and rates the way they are right now, not to mention stamp duty, you might just be surprised… Why not try our nominated UTILITY OF THE WEEK: The Rent or Buy Calculator Link.

Half of HMO landlords rely solely on their property income. Nearly 30% of surveyed (Landbay) landlords owned HMOs, with 72% holding them through limited companies. Despite complexities, almost half of these self-manage their properties. Most portfolios are small (4-10 properties). The highest proportion of HMOs is in London and the South East.

Inflation is on target, but Owner Occupier Housing (OOH) costs continue to accelerate upward – creating further financial squeeze on households – contributing a dampening effect on the housing market – checking the recovery. Likely to be a relatively flat 2024, with potential rises towards the end of the year.

First Time Buyers. Concerns arise over first-time buyers’ support in the upcoming General Election. Skipton Building Society’s research shows many tenants consider moving back with parents to save for a deposit, despite it feeling like a step backward. Rising rents and high living costs hinder savings. Rightmove notes a 61% surge in mortgage payments since 2019.

Party Housing Policy. Aneisha Beveridge of Hamptons highlights minimal differences in housing policies between major parties. Both aim to increase homeownership through building homes and mortgage guarantees. Labour focuses on tenant protections and planning reforms, while the Conservatives extend Help to Buy. Both support leasehold reforms and maintaining the stamp duty nil-rate band for first-time buyers.

Boilers. Labour pledges to scrap the Conservatives’ 2035 gas boiler ban. Instead, they will offer financial incentives for heat pumps, ensuring no one is forced to remove their boiler. Labour aims to make heat pumps affordable and practical, possibly extending the Boiler Upgrade Scheme to more homes.

Source: Bank of England. The Bank of England Base Rate remains steady this month ahead of the election. Although still historically quite normal (compared with pre-2008) when looking longterm, it will likely drop slightly in the 3 months following 4th July…

BTL Mortgages. Mortgage lenders are adjusting rates and criteria to attract buy-to-let investors. Precise offers reduced rates starting at 4.49%, new fee products, and expanded options for HMOs, MUFBs, and limited companies. Mansfield Building Society now includes flats up to 10 storeys in its range, supporting unconventional circumstances in cities with high-rise buildings.

Scottish Rent Controls #1. The Scottish Conservatives claim the SNP caused a housing emergency in Scotland by introducing a rent cap that backfired, leading to landlords leaving the market – pushing up rents even higher due to lack of supply of rental property (and Landlords). They pledge to oppose rent controls, pilot a rent-to-own model, and introduce a national Housing First programme to end homelessness.

Scottish Rent Controls #2. Scottish Housing Minister Paul McLennan pledges to collaborate with landlords on rent controls amidst a housing crisis. While he plans to meet the Scottish Association of Landlords, details are sparse. A coalition of housing groups, including Shelter Scotland, criticises the government’s lack of concrete actions, urging more investment in affordable housing and political commitment.

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Song of the Week (what’s kept me going) 🎵 Sinner – The Last Dinner Party 🎵

And Finally… You’ve got to admire the eternal optimism of Estate Agents’ property descriptions. It’s a trait less commonly found in people these days, so I’m glad it’s still alive and well somewhere. Is the property next to an all-night nightclub? Well that just means you’re lucky enough to live in a “VIBRANT NEIGHBOURHOOD“. Does your house look like a bomb hit it and then came back for seconds? Well that’s sure to be an “INVESTOR OPPORTUNITY”! Is the property on a street that you wouldn’t let Arnold Schwarzenegger walk alone down? Well, that must mean the house is in an “UP AND COMING AREA” of course! Grab it now!

What do M2P do?
Married2Property aim to help Housing Associations, Cooperatives, Charities and Councils to increase their housing stock – helping to home the homeless as well as other vulnerable groups.