There are a lot of things we could not be certain of in life, but what we can be certain of in life other than death and taxes is an increase and decrease in property prices. This might not affect you at all, but if you have a property plan, this might concern you, no matter what you are in property development, a buyer, seller, investor or tenant. As hard as it is to admit, there are many reasons that affect property prices including politics, property and the economy. In another word, the changes in politics and economy affect the future of the property market.
The decisions made by the government will affect the property market continuously, whether it is positive or not. Let’s look back to the late 1980s, where the Conservative government announced the social housing will be reduced its investment, and they encouraged the “the right to buy”, that basically turned out to have enormous rejection for tenants who are not capable, and it continues even until today.
Although people owned houses in the 1990s, the government then announced and encouraged people to invest in the Private Rented Sector, that of course, gives more than one million households the private renting benefits. Meanwhile, the council waiting lists have more than one million households waiting
Of course in certain situations or recessions, the government tries to:
- Lower down the debt in the property market, specializes in housing
- Encourage more people to own a property especially first-time buyers
- Control the increment in house prices that affected by investment tradings and level of debt
This determination in improving the law affects every aspect of the property market, which also include:
Restrictions In Debt And Mortgage
By not allowing owners of the properties to do repayment mortgages and enable more strict affordability tests, the government only can hope to have the amount of limitation of the damage in the circumstances of another credit crunch. This would make it hard for people to further maintain their property or hire a flat roofer to do any modifications to their property.
Reducing Buy To Let Demand
A new measure started taking place by the government to make sure the growth of the private rented sector increased with taxation for but-to-let investors stable. Apart from the stamp duty and loss of interest relief on finance over the years. This was also affected by the changes in adding licensing law, energy efficiency and safety.
The demand for buyers decreases, for example, when you are thinking of buying Canninghill Square in Singapore, it is basically what will happen at a local level that gives a big difference to your property market.
Another example, let’s say an area of rejecting industries – such as Venezuela, that relies and depends heavily on the oil industry – their property prices and rents because their people intentionally postpone moving house or if they are renting, they are mostly unemployed and could not afford to pay if the landlords increase the house renting. Thus, the prices remain as the landlord also could not do anything about it.
Home is everyone’s necessity but currently, we can see how demand in most areas have increased due to the population growth, unreliable policies, including decisions made by the government and authorities when it comes to supply.
But what is interesting is that as the year goes by, things change as well. After the events of property that made us frightened in the 1990s, it is a relief to no longer have to worry as – it is stated that half of the owners of home properties have their property outrights, which you can tell how unaffected they are by the mortgage rate increase and repossession risks. Other than that, in the past few years, people who are known to have a mortgage are now only required to do repayment, which means they are paying it from day one.
To conclude, there are many things that are known to be the factors of changes in the property market. But in order to have power in the property market, you are always required to find out and do a bit of research on politics, property and economics. In simplest terms, you could also check out the latest news on news channel television, or social media to get more information, that is why the role of social media in politics is important as well. Meanwhile, reading the news and books regarding buying properties’ strategies.