General Election date set – will the property market pause?
Experts discuss what will happen to the property market in the light of the news of the General Election being called for 4 July.
Prime Minister Rishi Sunak yesterday confirmed a date for the General Election.
Voters will go the polls on 4 July, meaning the General Election campaign and installation of a new Government will coincide with the typically quieter summer period for estate agents and the property market.
Richard Donnell, executive director at Zoopla, said the election announcement is likely to stall the pace at which new sales are being agreed in the coming in the run up to the summer slowdown.
Donnell said:
“Most buyers well into the home buying process close to agreeing a sale will ideally want to push through and agree to sales now.
“Those who are earlier in the process may look to delay decisions until the autumn after the election is over.”
Donnell said Zoopla doesn’t see the election having as big an impact as in previous years, particularly as there is not a huge divide in policy between the two main parties.
However, sales completions over 2024 may now fall slightly short of the 1.1m that expected for 2024.
Donnell added:
“What businesses and landlords will want to see from all political parties are concrete plans for how we can boost housing supply across all tenures while getting the right reforms to the private rented sector to ensure we maintain supply while giving renters more protections.”
Dominic Agace, chief executive of Winkworth, added:
“With positive news in the offing and a New Labour version of the Labour party being proposed, we don’t expect significant disruption.
“Interest rate cuts are expected and growth upgrades for the UK paint a picture for an improving property market this year after an already positive start.”
Winkworth commissioned research earlier this year by Dataloft, which looked at price changes before and after the six General Elections since May 1997.
In the three months before the December 2019 election, it found that prices increased across the UK by 4.2%. Three months after the election, the price increase was just 0.7%. Prices rose by almost the same percentage in advance of Tony Blair’s win in 1997, as before Boris Johnson’s victory in 2019.
Only in the 2005, 2010 and 2017 elections did the price growth surpass the preceding period. In the remaining four elections, prices continued to grow in the three months post-election, but at a lower rate, the research found.
Pre-election uncertainty has a short-term impact, according to the research, slowing the number of sales in the three to four months before voting day. This pattern holds true for six out of the last seven elections. Once the election result is known, the increased certainty over the political landscape and policies will normally allow the markets to pick up momentum again.
Agace added:
“The biggest house price growth came when Blair was in power.
“We saw a rise of £48 a day on the average property price, which is contrary to popular belief that the Thatcher era saw the biggest growth due to Right to Buy.”
Nathan Emerson, chief executive of Propertymark, said:
“Housing is the cornerstone for every single community across the UK.
“It’s the foundation to a strong economy, and must be a key theme that all political parties are placing front and centre of their general election campaigns.
“Many successive governments have failed to keep pace with demand, and we would encourage potential policy makers from all sides to place a rejuvenated emphasis on tackling current issues and meeting future demand.
“There must be a sustainable mix of housing solutions for both buyers and renters, as well as a commitment to ensuring the UK leads regarding, innovation, quality, and environmental sustainability.
“In addition, any new government must ensure there is comprehensive support in place for first time buyers to prevent the prospect of home ownership being out of reach, but equally ensure the housing market remains balanced for all.
“It is also important there is a full-scale commitment to ensure wider infrastructure is also planned for, as we witness an ever growing population.”
Kindly shared by Estate Agent Today
