fbpx
27.06.2024

Will The General Election Impact The UK Property Market?

By Jenna Coghlan

With the general public going to the polls in just a few weeks, the Rowe & Co team has received a number of questions regarding the impact general elections can have on the UK property market. Should you delay your property purchase? Should you put your Chandler’s Ford property on the market before or after the election? And what could happen to home values after the election? 

Although we don’t have a crystal ball to predict the shape of the UK property market post-election, there are a few things we anticipate could happen in the run-up to July 4th and in the immediate aftermath…

Past Performance Suggests Property Values Could Increase

Research from Compare My Move indicates that house prices typically increase by an average of 4.6% in the 12 months following a general election. This could mean that the average Chandler’s Ford property, which is currently valued at around £399,000, could rise to over £417,000.

What’s more, the same Compare My Move research suggests that house prices increase by an average of 6.9% more when a party wins by a majority compared to when the election results in a hung parliament. With current polls tipping the Labour Party for a landslide win, this could dramatically impact property values. So, if you’re looking to move in and around Chandler’s Ford, now could be the time to do so before house prices begin to escalate.

Transactions May Stall

Although there is speculation that property values could increase over the coming months, transactions in the meantime may stall, especially in the run-up to the general election on July 4th. Some buyers may decide to hold back on big purchases until the election period is over. 

Calling a general election causes potential market volatility and economic instability which could impact mortgage rates, hence why some buyers may choose to put-off their home search until certainty resumes and the next government is elected. 

We are already beginning to see some changes to the mortgage market since Rishi Sunak announced the election, with rates continuing to increase. According to Moneyfacts, as of June 12, the average interest rate for a two-year fixed-rate mortgage is 5.97%, while a five-year fixed-rate mortgage averages 5.53%. Earlier this year, rates were lower. On February 1, the average rate for a two-year fix was 5.56%, and for a five-year deal, it was 5.18%. However, mortgage rates have been increasing each month since then.

However, prospective purchasers and sellers should not worry – the Bank of England interest rates are still scheduled to come down in 2024, which will most likely lead to more favourable mortgage rates for purchasers. 

Huge Changes Are Unlikely

Despite the speculations surrounding what could happen before the general election, the likelihood of huge, disruptive change is minimal. Historically, general elections have only resulted in minimal shifts to property prices, with Robery Gardner from the Nationwide Building Society stating that “housing market trends have not traditionally been impacted around the time of general elections… elections are not foremost in [movers] minds while buying or selling property”. As such, it is advisable that home movers continue as usual in the run-up and aftermath of the general election.

I’m Thinking Of Buying Or Selling – What Do I Do?

The general election may have created an air of uncertainty around the UK property market, but we strongly advise that prospective buyers and sellers continue as normal. The world of politics is uncertain, so sellers hinging their hopes upon post-election price increases may end up disappointed should values remain the same, or even stagnate. The same goes for homebuyers – hedging your bets on mortgage rates eventually improving is a risky move, and even if rates do come down, this will happen very marginally. We strongly advise that you consult with a financial advisor prior to buying or selling your home in order to access more tailored advice. 

As your local property experts, our team are always on hand to help you make your next property decision – whether you’re actively planning a move or simply considering your options. Get in touch with our team below!


Share this article

Instagram.

@roweandcohomes