CBI Director Tony Danker is right, these are unique times and we need to plan but are the current plans appropriate.
We wanted to comment on parts of the government’s plan for growth before this changes again. U-turns are becoming fashionable and we may not have seen the last one related to the September 2022 economic statement.
The overall approach is concerning, when trickle down economics has failed every other time. We are hardly qualified to judge but financial institutions across the globe have not been supportive.
The effort to sell to the British people also raises questions. Our government’s website states we will all save an average of £1,150 on energy bills, when the policy means we will be paying £1,150 less on a still rising bill.
This support is still welcome and essential for many families but the overall economics remain opaque. Perhaps we should stick to property, as a removals company we have a need and responsibility to try to understand that market.
Direction Of Property Prices
The Chancellor’s statement was clear on property “Cuts to stamp duty will get the housing market moving and support first time buyers to put down roots.”
This has in the past given a boost to house prices but a negative reception from money markets to the latest announcements mean mortgage rates will rise. Many buyers would see stamp duty savings wiped out within months.
They would have to find less up front but be concerned about affordability, as would the institutions lending them the money. Rising interest rates could make both parties reticent to proceed with a loan.
If the announced Investment Zones ever happen, this will release more land for housing. Repossessions and to a greater extent vacations are already growing to a degree, not a positive in what is a supply and demand environment.
With an already cooling market, no real financial benefit for buyers and continuing political uncertainty, we are struggling to see why house prices should grow. The opposite looks more likely, although better news could arrive.
Quite Different Policies
The policies we saw announced have their origins in a book published in 2012. This was entitled Britannia Unchained and co written by a number of then new MPs, including Liz Truss and Kwazi Kwarteng.
Seeing the ideas announced for real 10 years later was interesting but they have sold even less well than the book. The policies, perhaps the people behind them will not last and we should see rationality return quite quickly.
There will still be general interest rate rises, to try to control inflation but this does not dictate every economic aspect. The position of sterling, inflation forecasts and mortgage rates should settle back to a more reasonable level.
Nobody is suggesting a boom is around the corner but house price collapses have been forecast before in recent years and not come about. The nature of our islands, our population and individual wishes make property a desired commodity.
Why Farrer & Fenwick Care
Our business is directly related to the property market, so we need to care for our own reasons but do hopefully think beyond this. We have to plan for our customers, ensure they have access to effective resources for a trouble free move.
Farrer & Fenwick are an established removals company and able to adapt to change, so whatever occurs, we will be here for you. All of us still hope and believe on balance that we will be continuing to support a rational housing market.
There is bound to be a period of sobriety, rather than boom but as long as credibility returns in government, a home will remain an asset we all treasure.
