Hung UK Parliament – what does is it mean for the Falkirk property market?

The thing about the unexpected is that the more ‘unexpectedness’ there is the more the unexpected becomes the expected.  Therefore, whilst the UK General Election result on Friday morning might have been unexpected, it was less of a shock that the other ‘unexpected’ voting results we have had recently like the UK voting for Brexit and the American people voting for Donald Trump.

So, the UK people have spoken which means that life is all sorted now and we can get back to normal living then?  

Well, not quite.  There are still a few ‘small’ UK wide matters to sort – What will the deal between the Conservatives and DUP look like? Will ‘gambler’ Theresa May be replaced as Prime Minister and, if so, by whom? and Will we have another General Election within the next 9 months to name but a few.

And then, of course, there is the Scottish specific issue of the ‘staggering’ losses suffered by the SNP which were so staggering that they are only eclipsed by the significantly more staggering gains by the SNP at the 2015 General Election only a couple of years ago.  Tactical voting, I hear you say.  Well, interestingly, probably not as whilst the SNP are still the largest party in Scotland their share of the vote dropped from 50% to 37% which is significantly below the 45% who voted Yes in IndyRef 1 and the 50.1% needed to vote for Independence.

So what does all this mean for the Falkirk property market?  Well, there is the detail and then there is the big picture.

Taking the detail first.

From a UK perspective, the UK Government will be so terribly focussed on the Brexit negotiations that I suspect little will fundamentally change domestically for a couple of years at least.  However, if it does, then we have a Conservative led Government whose manifesto seems to suggest little change.   I suspect that I would be having more to say if Jeremy Corbyn’s Labour Government had won the Election.

Turning to Scotland.  The Election losses suffered by the SNP and the fairly constant accusations against them during the Election that the SNP Government needs to do a better ‘day job’, will mean that the Scottish Government will re-double its efforts to deliver on its key 2016 Election pledges around Education, the NHS and Housing.  Given that Housing is the least ‘oil tanker’ like of these three, I suspect that the Scottish Government will focus hard on trying to achieve their key Housing pledges:

• Building 50,000 affordable homes by 2021.  As I have gone on about before, whilst this is welcome, it is not enough homes to begin to solve the current housing crisis – at best, it will stop it getting worse.
• Rural Housing Fund.  This is effectively more affordable homes.
• Restoration of Housing Support to 18-21 year-olds.  This will help 18-21 year- olds get their own homes thereby increasing demand for housing.

These key objectives, which are already out there, will not fundamentally change the Falkirk housing market.

And then there is taxation.  Property owners have been ‘fair game’ for tax increases over the last few years and this may well continue.  However, it is worth noting that the Conservative UK Government is likely to be less bad than a Labour UK Government and the SNP have worked out that most of the taxes that they can change are likely to bring them in less money if they increase them and so are less likely to do so.

And now the big picture.

Last Thursday’s Election result has not affected the biggest current problem in the current Falkirk property market which is that demand is increasingly outstripping supply ie there are just not enough homes.  Given this, it is business as usual.

Also, the Falkirk housing market has survived many, much bigger, shocks than last Thursday’s Election result including the  2007 Financial Crash, the Brexit Referendum vote and Trump winning the American Election.

So I suggest that you keep faith with the Falkirk property market.

www.thekeyplace.co.uk

#falkirk #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning

Can you still make money from property in Falkirk?

I’ve spoken to a few of Falkirk’s landlords over the past few weeks who feel the property market may be about to flatten out, having seen sensational gains over the past few decades.

On the other hand there are others I’ve met who are new to buy-to-let and comparing what else they can do with their money today, rather than seeing property as expensive now compared to the past.

And as I’ve said many times, property still remains one of the best places you can put your money based on the facts as we know them today. Those facts being that yields in Falkirk are around 6-7% on average, which is significantly higher than the sub 1% available from savings accounts. It’s also higher than the average yield from the FTSE 100 (3.75%) and the average rate of mortgage finance.

It’s easy to fall into the trap, as I have done in the past, of thinking “well I’m not paying £120,000 for that two bed house when next door sold for just £100,000 three years ago”. We have to remember it’s not three years ago however and base our decisions on the opportunities available now.

I do still find myself reflecting on “what might have been” though. Most recently a flat on Stirling Road, Falkirk sold for £64,800 - five times the £12,800 it cost 12 years ago back in February 2005.

There’s still some who are making gains from short-term property transactions although I am not a great fan of ‘doer-uppers’ (ie people who buy, do up and sell shortly thereafter) as this leaves you exposed to the short term vagaries of the property market.

Nonetheless, some shrewd buyer on Thornhill Road, Falkirk has made short-term gains at the beginning of this year. Having paid £45,750 for a house October 2015 they re-sold it for £53,000 in March 2017.

Property is not all a one-way bet however, particularly in the short-term, as one buyer of the house in Ladywell, Falkirk found out.  Having paid £51,000 in May 2012, they had to settle for £23,000 less when they sold it in March of this year (and pay all the associated buying & selling costs).

Even the past decade hasn’t been kind to all property buyers either. Whilst the average property in Falkirk has increased by 20% since 2007, in January 2017 a flat in Towers Court changed hands for £45,000 - some £25,000 (36%) less than the previous owners had paid 10 years earlier.

I still think there is value to be found in Falkirk’s property market – you just need to look a little harder and grind down into the fundamentals of a property a little more than you used to although the surprisingly high level of rents that are being achieved at the moment is very helpful.

As I don’t sell property I’m happy to give some free impartial advice to would-be investors to help find a property that suits your requirements. If you’re interested just get in touch (Office 6 Vicar Street, Falkirk; phone 01324 469840; Email news@thekeyplace.co.uk).

www.thekeyplace.co.uk

#falkirk #property #buytolet #realestate #ownermanagedbusiness #retirement #retirementplanning