July 2024 Market Update

It’s officially Summer and the general election is this week! If you’re wondering whether the election has had much influence over the UK housing market… the answer is no. Let’s take a dive into the impacts the run-up to the election has had and look forward to how the outcome may impact the housing market.

We Brits appear to quite blasé about these things – if a pandemic can’t hold us back, then why should an election? In the past of course, the political parties had substantially different policies, so the outcome of the election had a huge bearing on people’s appetite for a house move.

This time around however, in the scramble to secure votes, both of the major parties are offering property-related incentives: the Conservatives are promising to freeze Stamp Duty, Capital Gains Tax and Council tax, whilst the Labour party, currently favourites to win, are promising to offer a mortgage guarantee that they claim will enable over 80,000 young people to buy their first home, rather than renting.

So there is nothing scary expected from the election, and fortunately, unlike some elections in the past, there was no protracted period of uncertainty affecting the property market due to the short nature of the lead-up. In fact, since December, property sales values have risen by a whopping 5.1%, although this is more likely to be higher-end properties having reduced their price substantially in order to achieve a sale. Across the UK properties are actually taking 7% longer to sell than they were this time last year, and 80% of those properties were sold below asking price. And there are about 18% more properties coming to market too.

Any caution surrounding the election seems to lie at the top-end of the market, with those sellers who typically have different motivations to their move than those in the middle and lower sectors of the market.  Over the period of June, both buyer demand and sales being agreed are up on last year, with sales agreed up 6%, and buyer demand up 5%. Rightmove interestingly did a poll of over 14,000 people to assess the impact of the election on home-movers decision-making and found that for 95% the election would not impact their decision to move home. Since the election was announced, we did however see a change in behaviour in the top-of-the-ladder sector, with the number of new sellers coming to market now down 3% on the same period last year. Comparatively, prior to the election announcement the number of new sellers at the top-end of the market was up 11% on last year.

But, a good indicator of the state of the market is to assess the relationship between sales agreed against accumulative property available for sale. This has now settled from the heady heights of the inflated pandemic market which saw the number of sales arranged at 98% of property for sale and, since the beginning of the year, this has settled to around 69% – the long-term average being 70% so you could say that we’re back to about as normal a market as one could expect.

Overall, the election hasn’t impacted the housing market much at all and due to the similar housing promises made by both main parties, the Bank of England rates are sure to be more of a concern for movers. Mortgage rates are still high, currently sitting at an average of 5.04% for a 5-year fixed product. Now, significantly better than the 6.11% peak we saw last July, there is still a way to go. The beginning of 2024 had much hope for significant cuts to the Bank of England’s base rate but, halfway through the year, the base rate remains fixed at 5.25%, and mortgage rates on average have actually increased ever so slightly since the beginning of the year. Some lenders have issued cuts to their products while others have increased their rates, so it’s key to shop around for a mortgage currently, and speaking to an independent mortgage advisor is the best way to go about doing this. A significant cut to the base rate would likely allow lower mortgage rates which in turn would bring a renewed confidence to the market, and will likely have a much greater impact on the market than the policies announced in the lead-up to the election.

Moving house is a big deal – so why not let us guide you through the process? If a sale looks like it could be on your manifesto in the coming weeks, then vote for us to help you with your move. We’d be delighted to hear from you and happy to offer straight-talking advice without any obligation. Call us on 01323 440678.

Data sourced from publicly available sources including Rightmove, Zoopla, Nationwide