The autumn statement was announced yesterday, and the question on every property investor’s mind is how will the autumn statement affect property?
It could be said that this was the one we’d been waiting for, but politically it certainly didn’t feel as though it landed with a particularly good reception.
‘From bad to worse’ said Friday’s Guardian. ‘Hunt clobbers workers’ said the normally sympathetic Daily Telegraph, but perhaps most concerning for the chancellor was the Daily Mail which practically screamed ‘Tories soak the strivers’ in enormous block capitals right across its front page.
Certainly from workers, higher-earning employees and the middle-class perspective, it wasn’t a particularly exciting or uplifting autumn statement, but we’re going to try and delve a little deeper.
There can’t be many that failed to notice that the economy is under some pressure right now. With rising inflation, a cost of living crisis and the war in Ukraine, some strong headwinds are blowing towards the UK, but what was in there for property investors and those in the UK property investment sector?
So, how will the autumn statement affect property?
Perhaps one of the most interesting parts of the budget in terms of the UK property market was the announcement that the government would phase out stamp duty cuts from 2025.
Whilst some fear that it could further weaken an unstable price point in residential property, it is likely to be a cog in a wider machine that will see residential property prices drop across the UK over the next 12 to 24 months.
Beyond that, the wide expectation is that prices will recover to current prices in a fairly short time.
That being said, the temptation for many is to assume that moderate price drops are bad for property investors, failing to see the wider point that it provides an opportunity for many.
Whilst the asset prices may indeed drop the likelihood is that first-time buyers and others that may be looking to buy property are likely to hold off, with demand dropping off for residential properties, but this will consequently push up rental demand.
With a lowering of asset price but a rise in rental income, property yields are then pushed upward meaning better incomes for property investors and landlords.
Further, if property prices are dropping across the market but yields are higher it means that landlords looking to increase their portfolios are likely to find that they can afford properties at a lower price that will recover quickly and find that demand for those properties is sky high.
Rather than being the doom and gloom forecasted by many, it provides a huge opportunity for our clients that are looking to both buy and sell.
If you’re interested in buying or selling your buy-to-let property then why not get in touch with us today? We can talk you through all your options whilst offering sound advice from years in the industry.
Now could prove to be a very shrewd time to either enter the market or expand your portfolio.
