To consider this we must first look at the main background influences.
Firstly, political sentiment will be volatile in the run up to the general election, mansion tax concerns will heighten and there will also be a lot more discussion on increasing the Annual Tax on Enveloped Dwellings ‘ATED’ (please see my first blog of 1st September 2014). Secondly, interest rates will be benign, there is no overriding reason to raise them and we also have had another very surprising round of quantitate easing (QE) in Japan – years after their economic downturn. Further, Bank of England intervention in mortgage market lending will be limited – as its recent intervention has been very effective.
We will also read lots of opinion polls but I always think we should also consider the quoted odds for outcome scenarios at the bookies to gain another angle about the feeling of current sentiment. At the moment it is neck and neck between Labour and the Conservatives to win most seats but odds on that there will be no overall majority. It is easy to see why current uncertainty is so high.
I wrote in our recent YOUIQ (Link: http://www.youhome.co.uk/brochure/YOUIQ_Q3_issue_2014.pdf) predicting a three tier market – we can all now see this happening, but with increasing uncertainty the tiers of quality, average and compromised will be amplified and as more supply enters the market the extra choice will delay buying decisions.
As a consequence, in the next 6 months we are going to see a very low turnover in west prime central London sales property market with extreme flight to quality and value.