After the shock of the Conservatives returning to
power with a majority at Westminster, all the potential issues and possible
uncertainties of a hung parliament has lifted the cloud from the Chelmsford
property market. Talking to other Chelmsford agents, surveyors and
solicitors in the area over the last few days, there are signs this has started
a new impetus in the Chelmsford property market after a subdued six months,
when an amalgamation of tougher lending conditions, a natural correction after
the strong recovery in Chelmsford property prices in 2014, and political
uncertainty ahead of the General Election slowed demand.
Against the back drop of Labour’s election promises
of rent controls and three year tenancies, some Chelmsford buy to let landlords
were waiting to see how these new policies would be implemented before they
committed themselves to buying more property for their buy to let portfolio.
Now that uncertainty has been removed, the long term picture is very positive.
So, with all that uncertainty now removed, where
next for the Chelmsford property market? Well with inflation at zero and
with the Money markets happy David Cameron is still at No.10, the Bank of
England have no reason to raise interest rates until 2016 at the earliest. As
mortgage rates are at their lowest levels since 2010, landlords with large
deposits will now be wooed by the mortgage companies in the coming
months with low rates.
You see over the past couple of years, Chelmsford
landlords have benefitted from a booming Chelmsford job market. Unemployment in Chelmsford area has dropped
to an amazing 2%, compared to a year ago, unemployment in Chelmsford
stood at 4.9%. With more jobs and better pay, as the level of rents is directly
linked to tenant’s wages, there has been an increase in the rental prices
tenants are willing to pay for good quality Chelmsford properties.
Some landlords might be nervous about Tory’s plans
for the housing market over the next five years in terms of tenant demand for
their rental properties. One plan is for Housing Association tenants to have
the right to buy their property. These kinds of tenant were never in the
private rented sector and will actually increase the supply of properties in
the housing stock in decades to come. The Government ‘Help to Buy Scheme’ has
only helped to buy 94 Chelmsford properties since April 2013. Considering 1054 properties have changed
hands in the last year alone in the Chelmsford area, I don’t think it
has made a huge difference to our local property market.
The biggest matter, when it comes to tenant demand
of rental property going forward, comes from the shift in the mindset and
attitudes towards renting itself. Twenty years ago you were seen as a second
class citizen if you rented a property. Nowadays it is considered the norm. In Chelmsford,
as in the rest of the UK (apart from Central London), renting continues to
offer good value for money for tenants and therefore will continue to grow in
this decade, meaning everyone is a winner.
For more news and views on the Chelmsford property
market... visit the Chelmsford Property Blog www.chelmsfordpropertyblog.co.uk.
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