It’s that time of year. The days grow short, a new decade creeps ever closer, and everything you read online seems to be a series of lists looking forward to the year ahead or back to the year just passed.
In that noble tradition, we’ve put together a few predictions for what you can expect from 2020.
- An End to Uncertainty
With Boris Johnson’s resounding victory in the December election, the deadlock is broken. Whatever you think of the result, it’s now become considerably easier to predict where the UK will be in 2 months’ time. Whether it’s through a no-deal exit or Boris Johnson’s flimsily- constructed package, we will be leaving the EU on the 31st January 2020.
Of course, the economic impact of this remains difficult to predict but barring a full-blown recession it may at least begin to rebuild confidence among homebuyers. As we’ve covered throughout the year, the spectre of Brexit and a potential election have, at least partially, contributed to a slow 6 months with many people reluctant to move.
With one of those events now a virtual certainty and the other in the past, we should begin to see confidence in the market pick up again. Although, it’s worth noting things might remain slow throughout January as potential movers wait to see how Brexit falls.
We covered The Fifth Anti-Money Laundering Directive (5AMLD) in a recent blog, so for a more in-depth piece on the subject please head over here. However, with little time left until the 10th January adoption date, it’s worth recapping on what it is.
The 5AMLD is a series of tweaks to the broader fourth directive issued back in 2017, covering digital currency, transactions from high-risk countries, and access to payment account registers among other things. It represents a continuation of the trend towards legislators prioritising anti-money laundering efforts, so for conveyancers outside of the big London firms, there isn’t much new in it.
That said, it does up the stakes for failing to meet your AML obligations, meaning it’s more important than ever to make sure every transaction is accompanied by an AML check throughout the year ahead.
- Stamp Duty Overhaul
For the moment, this one remains a bit of a hypothetical. Prior to becoming leader of the Conservative Party, one of Boris Johnson’s key promises was to overhaul the existing stamp duty land tax (SDLT). Johnson pledged to redraw the current SDLT threshold by scrapping the tax on properties worth less than £500,000.
However, since becoming leader Johnson has been decidedly lukewarm and noncommittal on the subject, but could we see it revived once Brexit is resolved? It would certainly work as a gimme to many of the voters that brought the Tories power in the recent election.
One group certain to be affected by a Tory majority is foreign investors. The party’s manifesto included a commitment to raise the SDLT surcharge on foreign investors by 3%, following the 1% increase made last year. The manifesto pledge claims this will add £120 million to government coffers over 5 the years of Johnson’s term.
- A Bamboo Invasion
No, you’ve haven’t read that wrong; we’re really going to talk about bamboo.
Everybody’s aware of the damage Japanese knotweed can do to the structure of a building. In fact, one of the most high-profile cases this year came in the spring when a homeowner was awarded £50k after a chartered surveyor failed to spot Japanese knotweed prior to the purchase of a £1.2 million London flat.
But there’s a new threat on the horizon. Bamboo. Like Japanese knotweed, Bamboo is also highly invasive and can wreak the same havoc on a property if left unchecked. Some species of ‘running’ bamboo can grow up to 30ft below the ground, causing all manner of subsidence problems.
Unlike its Japanese cousin, it isn’t yet illegal to cause or allow bamboo plants to spread in the wild. Yet, it can pose exactly the same risks to property as knotweed and is increasingly becoming the source of bitter boundary disputes between neighbours. It might not have the same bad reputation as knotweed, but expect to hear a lot more about Pandas’ favourite snack in the next year.
- A New Year Surge
Although some industry figures, ourselves included, are predicting a slow start to 2020 as buyers wait to see what happens on the 31st January, others are predicting a post-Christmas surge.
According to research from Rightmove, five of the six busiest days of 2019 were in January and February. 13th January, 21st January, 27th January, 2nd February, and the 12th February were some of the busiest days last year and some in the industry are expecting more of the same.
These figures should probably be taken with a healthy pinch of salt, the political and economic landscape in January 2020 should be very different from this time last year. It seems unlikely the pending exit from the EU won’t cause a temporary slowdown in house sales as buyers act with caution but, admittedly, it’s a nice thought.
- Housing at the Top of the Political Agenda
We are in the middle of a housing crisis. Brexit may have temporarily obscured it but, after the NHS, housing remains one of the issues most important to the electorate. Perhaps as a result, the Tory manifesto contained several key pledges on housing, including:
- A promise to build 1 million new homes by 2025 (although, the eagle-eyed among you may have spotted that this equates to 200,000 per year, a decrease on the current target of 300,000)
- A new market in long-term fixed-rate mortgages, requiring only 5% deposits, to try and help more first-time buyers onto the ladder
- A new ‘First Home’ scheme, allowing first-time buyers to purchase at a 30% discount
Whether these will be enough to make anything more than a dent in the UK’s housing problem remains to be seen. Nevertheless, as the distraction of Brexit finally subsides expect housing to come roaring back to the top of the political agenda.