I'm a property expert: Investment advisor Anna Clare Harper says Labour won't build 1.5million homes

Property is a favorite British conversation topic. It feels as if everyone has an opinion on where house prices are heading, the next property hotspot or where homes should - and shouldn't - be built.

But to get a true sense of what's driving the market, it is worth listening to the people who live and breathe property day in, day out.

In this new series, we will be putting an expert through their paces each month.

We want to know their view on all of the hot-button topics mentioned above as well as mortgage rates, buy-to-let and housebuilding.

We will even question them about their very own mortgage, and their best and worst investments to date.

This month we spoke to Anna Clare Harper, chief executive of sustainable investment adviser GreenResi.

Anna hosts The Return property and investment podcast, which has 350,000 downloads, and has published three books on property investing.

She started investing in property on the side of her first office job, and now has her own buy-to-let portfolio.

At GreenResi, she has advised property investors who own or manage a combined 70,000 homes on sustainability.

Anna Clare Harper replies: House prices will likely rise by an average of 2.5 per cent over the next year, though this will vary by area and in real terms (after inflation), they will be broadly stable.

Demand is growing due to shrinking household sizes and population growth, while supply remains constrained.

Unless there's a surge in forced sales [when people default on their mortgages] most owners will hold out for strong prices, which will keep average house prices high.

Over the next decade, house prices will probably rise by around 2.5 per cent per year in nominal terms, driven by population growth and shrinking household sizes.

The Office for National Statistics projects that there will be 1.6 million more households in England in the next 10 years.

Add to this high net migration, which was 728,000 in the year to June 2024, and the pressure on housing supply will only intensify.

We're simply not building fast enough to keep up.

Policy and tax. I don't think we are likely to see taxes and regulations that deliberately negatively impact house prices, because this would be politically unpopular - but policy and taxes do influence prices indirectly.

For example, the abolition of non-dom status will influence foreign investor demand.

Mortgage rates are forecast to fall slightly as inflation cools and base rate expectations edge down.

I expect the most competitive five-year fixed rates to be around 3.5 per cent this time next year.

Rates should fall, but they won't return to ultra-low levels.

I have a five-year fixed-rate mortgage, which I took out in December 2024.

I chose five years for peace of mind, especially as the price difference versus shorter-term products was marginal.

It is a repayment mortgage, partly because that was the only option available from my lender.

Over-regulation. In trying to improve the quality and safety of homes to protect vulnerable people, which is an admirable goal, we've put in place rules and regulations which have made it much harder and more expensive for investors and developers to build new, or upgrade existing, homes.

We need to simplify and align regulation to meet a broader set of needs – including the need to build new and to upgrade existing homes quickly, so that we end up with more affordable, good quality, energy-efficient homes, not fewer.

No, I don't think they'll hit the target.

It's politically savvy to aim high and blame an outdated planning system for underperformance.

Even with reforms, building 1.5 million homes requires much greater investment and capacity - for example, enough skilled tradespeople.

Having a bold target is useful, as it sets the direction, but I don't know anybody in the property industry who believes the goal itself is realistic.

It depends on your goals. It's no longer the easy, passive income generator it once was.

Finance is more expensive and compliance is tougher, with around 170 laws and regulations affecting residential property and its management.

However, for long-term stability, income and capital growth, I still can't think of a better investment than residential property.

Ultimately, it depends if you want to be hands-on or passive. Direct property investment can offer an attractive 'risk/reward', as it gives a solid return, but unlike tech stocks, for example, it is stable.

However, property takes time and effort. If you're looking for passive income, you might be better off investing in diversified funds or Real Estate Income Trusts [companies that own and rent out property] because buy-to-let is no longer as easy as it was before.

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Landlords are often seen as villains, but then, so are property developers and estate agents.

The language doesn't help - 'landlord' and 'tenant' imply hierarchy that feels outdated and inappropriate.

The property investors I know want to do a good job, and see their portfolio as a business.

There's been lots of new regulations over the past ten years designed to discourage individual armchair investors, in favour of professional property investors who are easier to regulate and control, and encourage to improve standards.

That's why many older landlords are re-considering whether they want to continue.

It depends what your goal is; growth or yield.

For growth, I like areas with strong inward investment like Cambridge and its outskirts which offer world-class research, global employers and inward investment in a compact city with major infrastructure improvements on the way.

Demand is high, and supply is constrained. That's a strong setup for long-term capital growth.

Surrounding areas such as Ely, Waterbeach, and Cambourne offer lower entry prices, with strong commuter appeal, especially with transport upgrades on the horizon.

Personally I'm cautious about prime London locations which don't offer a strong yield, and where growth prospects are influenced more by taxes and regulations affecting international investors, rather than long-term demand from people who want and need to live in the property.

It won't return to its previous growth rates quickly, but the ongoing attraction of Prime Central London is its stability, so I wouldn't write it off.

London is still a global city, with strong demand and limited supply, though the frothy, speculative era fuelled by low interest rates is behind us.

I'd focus on supply, rather than demand. Unlocking more land, reforming planning and investing in skills and training for trades - for example, funding apprenticeships - would make building easier, and the results would last longer than stamp duty tweaks. More building would also boost local economies.

Keep emotion out of it. There are over 500,000 homes for sale in the UK at any one time, so don't fixate on just one.

Keep viewing other properties and be ready to walk away. That gives you real negotiating power and 'with or without you' energy.

Don't scrimp on professional fees. For example, hiring the cheapest conveyancing solicitor can be a false economy, and may cost you far more than the 'on paper' savings.

Don't be forced into choosing the solicitor an agent recommends. Read the reviews and do your own research, as an average house sale takes more than five months.

If you have concerns today, take the time to find another solicitor you can trust, or you'll be tearing your hair out in five months.

One of my favourites was 21 flats in Warrington, which the company I was working for bought for a private investor.

It had a solid 9 per cent yield from day one, and we improved the flats and their rents over time, as and when tenants vacated.

The location had great fundamentals – it's equidistant between Manchester and Liverpool, with strong infrastructure, jobs growth - for example, from warehouses from the likes of Amazon along the M62 corridor - and relatively low entry prices.

It had many of the fundamentals investors were looking for, yet many London-based or foreign investors didn't know about it.

An early project involved barn conversions, new builds and an extension all on one site.

Managing three teams was too complex, and I learned that conversions can be harder than building from the ground up, because there are often unexpected issues.

The deal broke even, and it taught me a valuable lesson: to minimise complexity unless the returns are exceptional.

Today, I'd avoid putting it all into a single property as £100,000 doesn't stretch far after all the costs, including higher stamp duty.

It's not enough to comfortably diversify across a portfolio to de-risk the investment.

So I'd go for a mix. For example, I would include low fee, diversified ETFs via a stocks and shares Isa, and invest in my business for 'high risk, high return'.