Brokers warn on impact of political rumours

Brokers warn on impact of political rumours

Brokers have criticised politicians for causing a “false sense” in the housing market by speculating over possible policies which may never come to fruition, resulting in potential missed opportunities for consumers who “hold back” buying.

Over the past few months, prime minister Boris Johnson, chancellor of the exchequer Sajid Javid, and shadow chancellor John McDonnell have all floated potential shake ups to the housing market in speeches and manifestos delivered to the public.

For example Mr Johnson was reported to be interested in both switching the stamp duty liability from buyer to seller and upping the property price at which stamp duty would become liable.

Mr Javid quashed reports he was backing a stamp duty switch but said he was aware the housing market needed “bold measures”.

On top of this, Mr McDonnell said he wanted to “tackle the burgeoning buy-to-let market” by giving tenants the ability to buy their home at a discount through a right to buy scheme.

But mortgage advisers have argued these “ideas” have a tangible effect on the way consumers behave when buying property, creating “uncertainty” and “undue stress” for those searching to move or buy a home.

Nick Morrey, product technical manager at John Charcol, said he had seen examples where people were avoiding any kind of property transaction based on the fact there could be some changes to the market in the near future.

He said: “It’s putting uncertainty into the housing market and causing people undue amounts of stress on a political whim.

“They should not be talking about this until it’s going to happen and there’s a date set. They need to stop vocalising their ideas until they have decided.”

This adviser sentiment is backed up by research from Experience Invest, which polled 1,000 property investors and found 59 per cent were waiting for the 2019 Autumn Budget before pressing ahead with their plans.

The research also found 55 per cent were waiting on the outcome of Brexit while 52 per cent were monitoring properties they wanted to purchase but were waiting to see if prices fluctuated.

James McCudden-Hughes, broker at Private Finance, said: “[There is] certainly a number of people waiting to see if there are any changes to legislation in the property world.

“For example, I have a client holding out on a buy-to-let property in London because there’s talk of stamp duty changes — purely on the basis of talk.”

Mr McCudden-Hughes thought although the decision to wait could be considered risky as the landlord buyer could lose out on a suitable property by waiting, it could also end up being an “incredibly wise” move if stamp duty is reduced and saved the buyer thousands of pounds.

He added: “You can see both sides of the argument. It can be frustrating — especially when someone gives it a lot of talk like Boris Johnson. 

“He says a lot of things that may not come to anything and it can create a false sense in the market.”