The Boris Bounce, is it real and what will the effect be on the Elmbridge market?
If you have any interest in the news and particularly property then you can’t have helped but hear about the Boris Bounce, the supposed positive effect that the pre-Christmas election result has had on the housing market. If we step back and look at the preceding 12 months leading up the election then the market was in a very gloomy place for buyers, sellers, renters, and landlords. There was huge uncertainty causing caution amongst all involved. Nobody wanted to commit and so the property was going unsold and unrented as people sat on their hands while they waited to see what would happen. Unlike previous market downturns though, this wasn’t being caused by a recession, or high-interest rates, or unemployment, it was just people being cautious because we are going through unchartered waters.
We have seen numerous market peaks and crashes in the last 30 years but none of us have ever been through Brexit! So when the election came along, it was almost inevitable that whichever way it went, we would see a huge exhalation as everyone relaxed and felt they could move forward. The fact is, we still don’t really know what Brexit will bring but we are all fed up with waiting and have decided to move again anyway. The phones are ringing, houses are going onto the market for sale, tenants are looking to rent, buyers are out again. This doesn’t mean prices are going up in the immediate future, it just means transactions will happen and fluidity returns, hooray! In sales I believe supply will keep up with demand and this will keep prices from overheating too quickly.
However, there is a very different landscape in lettings. Continued tinkering with the private sector by the government is making it less attractive to the traditional landlords who miss the old days of 5-10% yields. The private rented sector will be facing a crisis in the immediate future with a severe lack of stock and a growing number of tenants in the market. This can only mean one thing, a rise in rents. Sorry tenants, you can blame the government for this one but if you are an investor, or thinking of investing in a rental property then this is a very good time. Capital values are relatively low and new stock will be coming available this spring and summer. If you can stomach a bit more legislation and less tax benefits then the long term investment in property is still one of the safest places to keep your money. If you are considering it then knowledge and research is key. We have been dealing in the investment and rental market in Elmbridge for 30 years and have exceptional experience in all aspects of the industry. We love to talk property so why not call or pop in for a chat.