Reading between the lines, and maybe putting a tiny bit of positive spin on things, let’s take a look at some of the possible upcoming property-related announcments that property investors can take from the recent Conservative Party Conference.
* Brexit will be a bumpy ride. Just in case anyone was in doubt. Added to which most forecasters are forecasting reduced or even minimal economic growth for the UK in the immediate future.
So how can this possibly be a positive? A slow economy and poor jobs growth could be good for landlords, with tenants opting to stay in rented accommodation rather than buy.
* Britain’s future could be outside the Single Market. One consequence of which could be that new building costs are pushed up. In a pre-Brexit referendum survey by Building magazine just over half of all respondents in the construction industry said it would increase labour and materials costs.
Positives to take. Property values could be pushed up as a result, making now a good time to buy. Again, that could keep tenants in the rental market so favourable to investors.
* Support for the economy. The new Chancellor Philip Hammond, has suggested there will be continued investment to support the economy during the Brexit period, and possibly a loosening (though not an ending) of austerity measures. Major projects like HS2 and, possibly, Heathrow Airport expansion could see billions of investment over the next two decades.
Positives to take. Good for business, good for jobs, good for housing and rental demand.
* New push to build more houses to meet demand. The Government will provide £3bn for a housebuilding fund and make £2bn worth of funding available for housebuilding on public land. Support for building on brownfield land and accelerated building methods. These schemes are intended to build 25,000 additional homes by 2020, with a long term aim of 200,000 additional homes, all adding up to 1m new homes on the ground by 2020.
Positives to take. Good for the construction and property business. But a possible risk – large scale housing supply could negatively impact on property prices in a slow economy.
We simply need to build more homes.
This means using the power of government to step in and repair the dysfunctional housing market.
Theresa May, 5 October 2016
* Student market. There will be an extra 1,500 places for medical students each year from 2018.
Positives to take. Good for landlords letting to students, especially in cities with the most popular medical students. But a possible risk – new measures will make it more difficult for overseas students (which from 2019 will include EU students) to get visas – so possible downward pressure on student numbers.
* Immigration. David Davis, the Brexit Secretary, said that immigration will be reduced post-Brexit. He also said that the rights of EU citizens living in the UK will be protected as long as the rights of Britons living in Europe are similarly protected – something that the EU itself will decide.
Positives to take. Some reassurance for landlords who let to foreign workers. But Home Secretary Amber Rudd has said that companies who prefer to hire foreign workers rather than train young British workers will come under scrutiny. Although more jobs for young workers could be a positive for both the lettings and sales market.
Here are some other Pi articles on the subject of Brexit which you might find useful: