Last Wednesday marked the official State Opening of Parliament following the Conservatives’ victory in this year’s UK General Election. Surrounded by all the usual pomp and ceremony, Her Majesty took to the throne in the House of Lords to deliver the hotly-anticipated Queen’s Speech, through which she outlined some of the key legislation promised by David Cameron’s party.
The Conservatives were keen to appeal to the business community throughout the Election, but what impact could some of their latest proposals have on domestic and international property investors? Here, we outline four important mandates from the new majority government that could affect you.
A renewed Right to Buy scheme will boost demand for property
The Right to Buy scheme will be extended, ensuring more social housing tenants up and down the country are able to buy their council home at a discount. First-time buyers under the age of 40 will be able to get up to 20% off their property, aiding the plight of those who are desperate to get on the ladder. It’s not exactly clear how the Conservatives plan to deliver their big plans for the scheme, although it has been suggested that they might subsidise the purchase of private properties.
Making more properties available in this way is sure to increase demand in the domestic market, elevate prices, and encourage more competition amongst our developers and investors.
Uncertainty over Britain’s future with the EU
David Cameron intends to hold an in/out referendum on Britain’s involvement in the European Union by the end of 2017. The move could have huge repercussions for international businesses, and the economy as a whole, so any uncertainty as to the future of Britain within the EU is likely to unsettle the property market. The government has suggested that the vote is brought forward to 2016 to avoid mass instability – a move which would be welcomed by many.
Devolution will give more power and control to local governments
England’s local governments are set to have more of a say in their own transport, planning and housing policies thanks to the planned devolution bill. The city at the centre of Chancellor George Osborne’s Northern Powerhouse vision, Manchester, will elect its own Mayor by 2017 and it is thought that the local economy will grow dramatically as the city is able to take back more control of its fiscal decisions. In turn, it’s expected that greater regional investment in many of our major cities will cause local property prices to sky-rocket, leading investors away from the allure of London and fully prepared to seek out opportunities elsewhere.
Other cities supporting the Powerhouse, notably Newcastle, Sheffield and Leeds, are also expected to benefit from faster economic growth as a result of devolution.
Delivery of the HS2 will catalyse growth in the North
The planned High Speed 2 (HS2) line is designed to shorten journey times between London and the West Midlands, opening up a stronger economic connection between the South and the rest of the country. Commuters that want to avoid highly inflated mortgage rates and rental fees in the capital will favour locations a little further afield, and this trend is likely to push up property prices in towns and cities close to the new railway network.
At Surrenden Invest, we’re certain that a greater level of investment into local regions can only drive burgeoning interest in second-tier cities and other up-and-coming locations, generating more lucrative opportunities for property investors who know where to look. The Conservatives have pledged to create a secure, stable economy, and, presuming they deliver on their promises, we think that the country could in fact be entering an extremely exciting new phase of growth and prosperity that will ultimately lead to higher demand.