If Corbyn becomes PM will the property market crash?

[StuckRut1]

Looking for guidance on this. I'm looking to buy a flat in zone 1 and when l mentioned to a colleague he was aghast. He said that l should wait till the New Year as there's a chance JC will be PM and if so the property market will crash big time. Is he talking rubbish?

You've no need to worry about that OP. He threw every possible financial bribe at the GE, yet still only got 4 more seats than Gordon Brown did in 2010.

The real worry is Brexit.

stuck I'm not sure what your earnings/savings are like, or your circumstances, but in your shoes I'd buy for the longer-term in an area that is likely to grow in price over time - a 1-bed flat in Zone 1 fits neither of those criteria.

Again, hard to say without having your budget, but I'd look for an "on the up" area in Zone 2 or even 2/3 borders, buy something with at least two bedrooms or room to expand, and in a condition where you could add value. That way you're fine to live there for a longer period if you want to start a family - see the bazillion threads on here about "Why won't anyone pay £400k for my 1-bed in Zone 12??" from young families bursting at the seams - you hopefully build some equity in by improving the property, and you benefit from buying in an area that has some reason to grow in value and hasn't been hyped up by firms trying to lure in overseas investors.

(We recently bought and are now renovating our family home. One of the things that made the search much less stressful despite my fusspot husband and giant pregnant belly is that for now we're in my "starter flat" which has a second bedroom anyway - much less pressure to compromise and buy the wrong flat under pressure.)

Financial bribes Naze?

Or costed manifesto promises targeted at ordinary people?

Meanwhile TM's entirely unbudgeted, Blatant actual bribe of £1 bn to get time warp terrorist sympathisers the DUP on board is what exactly?!

And Gordon Brown didn't claw his result back from an utter hammering in the local elections just a few weeks before, so your remark is entirely lacking in historical context.

Sadly, I rather think that the current enthusiasm on MN for Jezza is only possible because no one under 50 remembers the 70s. There's acres of comments suggesting that a more relaxed approach to the public sector would be better for young people, but only if you work in it. More people are employed by private concerns, and on average earnings are about 4% below the public sector. Free university tuition (which I am frequently reminded that I enjoyed between 74-77) was possible when 5% of the population went to university but is not realistic when 45% go. The circumstances have changed but re-nationalisation of industry and the rest of the Momentum manifesto is delusional twaddle. The wealthy and the talented will desert the country in their droves (as they did under Denis Healey's Chancellorship when tax on earned income was 83% and on unearned, nearer to 95%) because money and ability have greater mobility than the elderly and indigent. Who will the government tax then? The truest words ever written about tax came from a 17th/18th century Frenchman (Colbert): the art of taxation is harvesting the most feathers from the goose with the least hissing.

Love that quote @OCSockOrphanage !

OCSock. Totally correct. I remember the 70s too. It was dire.

I'm the OP. I've decided not to buy and wait at least a year. Rents are lower so l should be able to get something better for the next year while l wait. I can't bear the thought of negative equity and that l could have bought something much better. Thank you for your insights. It seems that Corbyn is not so much the issue but the over heated market and the weak economy. Now l just need to learn patience.

www.cluttons.com/sites/default/files/documents/london-residential-market-outlook-summer-2017.pdf

OP, you might be interested in the Cluttons London Residential Research reports. Downloadable link for the current one above (they also do interim bulletins). Lots of good info there inc rental forecasts...

Thank you I'll have a look at that.

Good decision. Just read FT report (30/6) which said any first time buyer buying in London right now is likely to end up in negative equity. This thread shows that there are so many complex layers of unprecedented situations - (Brexit, over supply, global investors) that we cant look back to guide a prediction on the future.

I would be tempted tho to throw in a low offer (30% below asking?) - as I am sure there may be a few BTL LL who want to off load now rather than wait for a property price crash, whilst rents are falling and their costs are increasing (depending on how much mortgage etc they hold)

www.ft.com/personal-finance/serious-money

I don't think there is much point in making offers 30% below asking at the moment. Any time l hinted at a low offer during viewing the EAs get very annoyed. Obviously, they've convinced the sellers that they (as opposed to any other agents) can get them a high price. Everyone seems to be happy to sit in their hands. Time will only move minds l think. I have no choice but to wait. Since l've started reading up on these matters l haven't found anyone who says that prices will stay at what they are now.

Don't be silly!
More low wages will rise.. More new purchasers. Productivity is likely to rise as there will be a release of the, 'we are all being shafted by the rich', thing.
Labour traditionally takes over in times of rising productivity because their agenda is country growth, not giving the biggest biscuits to the posh folk on a failing life raft

I would watch the market around September time.

I know every expert is saying the market I cooling but I have been trying to buy a place for the last few months (granted I am looking at doer uppers and those I can see a profit in) but i am not getting to view places because they are going fast

The increased social housing will move low income people out of decrepit.housing stock. Into new homes, and create new mobility for some, this frees up the decrepit property, or makes it less rentable, so investors buy it and create views, which further pressures the housing market and stimulates lending. Increases in mintage will mean cities become more affordable, and flexible workers are likely to flood into cities to live off low wages whilst they seek opportunities. That's become impossible. In the last ten years, and this again will pressure urban property.
Doid no one notice how runaway the property market was under Tony Blair and Brown? My flat doubled in value in a year under Gordon Brown. The tory economy stuff is a total myth... Created by themselves.. The agenda behind. 'hey let's all be careful' is 'hey why don't you work for nothing to' help' businesses.. Ie business owners... But nasty management never builds a long term business

The market has slowed and London seems to be noticing due to how expensive the property is. If I were you I'd be trying to make some really cheeky offers and see if anyone just wants to offload.

Oliversmumsarmy out of interest, where are you looking?

Round my way (SE London) I am seeing some reductions, lots of estate agents pricing "optimistically" and plenty of sellers refusing to budge on (IMO, inflated) prices. Things that are shifting are priced as they were pre-Brexit.

I'm looking in Zone 1 at the edges of good areas. I've been advised to steer clear of Battersea because of falling values.
scaryclown l can't understand either of your posts. Are you saying prices will go up under Labour because there will be a lot of new social housing built?

Same area but i am looking for something that is undervalued.
Last one I saw was a 4 bed bungalow in a very nice area of Surrey sat on a large corner plot in need of renovation. It was listed as £350000 the bungalows on the same road were near the £550000 mark. It went to the first viewer
In my home area the houses that are selling are the ones that are priced appropriately. For instance my own home is similar to a couple that I consider should be around £300000 less than it is advertised for. They have been on for over a year. On the other hand another house I think was priced for the right amount sold immediately.

If there is another election, why would JC affect it? I don't think there will be any affect unless he and labour propose policies that will affect it.

They don't have control over interests rates (well, I guess they can exert pressure on the BofE). So, that tool is gone.

I don't think they are likely to introduce any capital controls in the way of restricting foreign ownership.

The best I can see from them is perhaps more council houses being built (that is a maybe) which will help prices come down slightly, but will be cancelled out by more housing benefits (pushing prices up). So I think net will be to push prices higher.

The other thing they might encourage is high tax on empty homes. The lack of this is excellent evidence that neither Tories nor Labour are willing to do anything about house prices.

The problem is that both parties, and the population in general, now are in a huge pickle. What everyone wants is for prices to stay high (to keep owners happy) and houses to be more affordable (to keep non-owners happy). Guess what? Those aren't compatible. You can read about the "affordable" housing being built (usually at 500,000+ price). Given the complete disconnect in London with local wages, the only real solution is a severe crash, and the government will do anything they can, until it complete runs out of their power, to stop that.

In short, I don't think JC matters unless he is proposing a radical policy.

People on here do realise that a lot of "council" properties are leased by the council from BTLters

I assume the measures expected might include:

1. Increase in income tax for higher earners (both % increase and threshold reduction for higher rate);
2. Further reduction of tax relief for BTL investors;
3. Land tax as opposed to (or in addition to) council tax;
4. Possible lifting of the CGT-free status of residential properties to refocus property as a dwelling rather than investment asset (so an allowance system then CGT as per US tax law).

In addition to recent and ongoing BTL tax relief reductions, increased 2nd property stamp duty, and given 50% of z1 is BTL...all this plus the forex volatility caused by Brexit felt by the significant % of foreign investors (and as yet fully unquantified since Brexit has yet to happen) and expected impact on city employment (mortgage servicing, bonuses, rent budget) is why z1 is shaking so badly IMHO.

But as usual, it will stagnate before it falls, excepting desperate sellers. I pulled out of purchasing a z1 flat last June due to Brexit. According to land registry data it's finally gone for -22% original listing price and took > 1 year to sell. An anecdote, perhaps, but true.

This is a tricky one.

Tory supporters have to put out the "house prices will fall" story on places mostly frequented by houseowners, especially the more prosperous ones and those who own more than one house.

They will not want the "house prices will fall" story yo get out anywhere that young people, or anybody hoping to buy their first home, will see it.

Who do you think the post preceding mine is aimed at frightening?

Or perhaps not, sorry.

Of course the EA dont want you to offer -30% - as they will have -30% less commission - but they are legally required to pass all offers on. Flat I was looking at recently the EA more or less begged me to put in a low offer (I didnt because the SC was extortionate) - the owners were BTL - lived in Italy and were desperate for a sale. If you look at what they paid for it and they are still making a profit - someone who needs the money now might bite.