How the result of the General Election could affect homes built on a new political and economic landscape.
The British property market barely had a chance to catch its breath following the Brexit vote before Theresa May called a snap election on 18 April. Since then, it seems the property market has once more gone into hibernation until political certainty dawns.
Enquiries from new buyers, new instructions from those wanting to sell, and agreed sales in the housing market, have once more declined in May, according to the latest RICS UK Residential Market Survey. In addition, price growth also lost momentum and is predicted to slow further over the next three months.
“The latest survey suggests that uncertainty related to the General Election may have contributed to what appears to have been a disappointing level of transactions in the housing market over the spring,” said Simon Rubinsohn, RICS Chief Economist. “Perhaps the most ominous signal emanating from the data released is that contributors still expect house prices to increase at a faster pace than wages over the medium term despite the difficulty many first-time buyers are clearly having in taking their first steps onto the property ladder.
“The increasingly tight second-hand market remains a cause for concern with the RICS series tracking new instructions to agents recording its fifteenth successive negative reading. It is hard to see this as anything other a major obstacle to the efficient functioning of the housing market.”
The Halifax House Price Index also reflected a slight drop in prices over the last quarter, albeit with an increase on both a monthly and annual basis.
According to eMoov, low supply of stock has been the driving factor behind prices falling as the market has not had the fuel it needs to maintain the previous level of inflated growth. So with many buyers and sellers sat on the election fence until the dust has settled on the vote, it is likely the market will pick up over the next month or two heading into Autumn once they resume with their property transaction.
The data from Halifax suggests that the recent slow in house price growth could be reversing as the market prepares to kick back into life after the election.
“The unpredictability of recent house price trends demonstrates the turbulent landscape that both the UK property market, along with the wider economy, have had to traverse over the last year or so,” said Russell Quirk Founder & CEO, eMoov. “It is likely that the sector will receive a kick start from the many home sellers, who until now, will have been putting their sale on hold until the election dust has settled.”
Interestingly, a new analyse from eMoov suggests that house prices could be influenced by which way the vote goes. The study looked at historic house price data to ascertain which majority Government – Labour or the Conservatives, has had the biggest impact on house price growth per an annum during their tenures across all 650 parliamentary constituencies since 1970.
When the Conservative Government first took power in June 1970, the average UK house price was a mere £4,508. Nearly half a century later and today’s Tory Government sits in a very different landscape, with prices having increased by 4724.80% to the current average of £217,502.
But despite the Conservatives currently cultivating a housing crisis due to their inability to construct the required number of homes to meet buyer demand, historically they aren’t the best party for UK homeowners who want their bricks and mortar assets value to keep on climbing; this is, in fact, the Labour Party.
“This research really isn’t trying to highlight that one party is better than the other, but more which party is better for the UK populace, depending on their current residential situation,” said Quirk. “All the major parties have attempted to address housing in the run-up to next month’s election, but have outlined very little other than the usual empty promises on building and which, let’s face it, has historically ensured a rapidly rising rate of house price growth in itself.
“One wonders whether successive governments have purposely sought to strangle housing supply to encourage value growth and therefore a tail wind of voter enthusiasm for their particular political colour at successive elections?
“Therefore, we thought it important that both buyer and seller alike, have something else to base their decision to vote on, that was at least based on fact, albeit historical evidence.”
PICTURE CREDIT: secretlondon123