How does the upcoming general election affect house prices?
The average price of a property coming to market in the UK saw a minor drop of £21 to £375,110 in June, following a seasonal trend of price stagnation after reaching a record high in May, according to Rightmove.
Regional variations are evident, with the less expensive northern regions experiencing the strongest price growth, while higher-priced areas like the East of England and London witnessed price declines.
Despite the recent announcement of a general election, Rightmove’s data indicates stable market activity. Sales agreements and buyer inquiries remain steady, suggesting that most home movers are proceeding with their plans. However, there is a noted caution among some sellers, particularly in the high-end market, who are delaying their decisions until the election results are clearer.
Tim Bannister (pictured), Rightmove’s director of property science, noted the historical steadiness of market activity during election periods. A recent poll of over 14,000 people showed that the majority intend to continue with their home moving plans.
“However, some potential sellers appear to be watching and waiting rather than taking action, evidenced by a dip in the number of new sellers coming to market, particularly at the top-end,” Bannister said in the latest Rightmove House Price Index. “This is understandable when many of these sellers have more flexibility over when they act, but overall, it appears to be business as usual for the mass market.”
Election-related uncertainty has slightly impacted the number of new high-end properties coming to market. Listings for large homes have decreased by 3% in the past two weeks compared to the same period last year, following an 11% increase in the previous two weeks.
Housing has become a prominent issue in the election campaign, with various manifesto pledges being made. The property listing platform, however, noted that many of these proposals are extensions of existing schemes or are likely to benefit only specific market segments.
The timing of Bank of England rate cuts is a more pressing concern for most homebuyers. Mortgage rates remain high, with the current average five-year fixed rate at 5.04%, down from a peak of 6.11% in July 2023 but higher than the 4.94% rate at the beginning of the year.
Bannister said that while some housing proposals are positive, they could do more to support first-time buyers and those looking to move.
“Mortgage rates have been elevated for much longer than most expected, and a first cut to the base rate would be a big boost to mover confidence, as well as having a far-reaching impact on the market should it, as expected, lead to lower mortgage rates,” he pointed out.
“Lower mortgage rates will have the most immediate impact on the market. However, we hope that well-thought-out housing policies will lead to sustainable market improvements over the long-term.”
What are your thoughts on the findings of the latest Rightmove House Price Index? Let us know by leaving a comment in the discussion box at the bottom of the page.
