As we approach the UK general election scheduled for the 4th of July 2024, many are wondering about its impact on the housing market. Here's a closer look at the potential effects and what it means for buyers, sellers, and the market dynamics.

Market Dynamics Leading Up to the Election

The timing of the general election may influence decision-making among homebuyers and sellers. Typically, those nearing the completion of home sales will likely accelerate their transactions to avoid any uncertainty that an election could bring. In contrast, those in the early stages of buying might postpone making decisions until after the election results are clear.

Despite these tendencies, the overall housing market activity is robust, marked by an increase in listings and sales. This reflects a growing confidence among sellers and a desire to capitalise on the current market conditions, where mortgage rates are steady between 4.5% and 5%.

Current Market Snapshot

Currently, the housing market shows signs of recovery with an influx of properties and a rise in transactions. There are about 392,000 homes in the sales pipeline, a 3% increase from last year. This suggests that most buyers involved in these transactions are unlikely to withdraw, opting instead to proceed with their plans.

Election Impact Predictions

The upcoming election is not expected to heavily disrupt the housing market. Unlike previous years, the major political parties do not have sharply contrasting policies concerning housing. The focus remains on reforming the private rental sector and increasing the housing supply, which could continue to stabilise the market.

However, there might be a slight dip in the number of completed sales compared to the anticipated 1.1 million for 2024. This could be due to the usual summer slowdown exacerbated by election-related hesitations.

Strategic Implications for Stakeholders

Businesses and landlords will be particularly keen on the political parties' detailed strategies for housing. Effective plans to boost supply across various tenures and reform the private rental sector are crucial. These measures are necessary to sustain supply and offer better protections for renters.

Looking Forward

For many households, particularly first-time buyers and those looking to upsize, the motivation to move remains strong. First-time buyers are eager to escape rising rents, and potential up-sizers are recovering from last year's spike in mortgage rates.

As we navigate through this election period, the focus should be on maintaining a steady pace in the housing market and ensuring that strategic decisions align with the evolving political landscape. The aim is to foster a market environment that supports both buyer and seller confidence during and after the election.

Written by Veera Josey, 23rd of May 2024

Sources: BBC News, Zoopla