The announcement of a snap general election in June came as a surprise to many. If you’re considering buying or selling in the near future, this is how the election may affect you.
Certain areas of the UK’s property market have been running hot in recent years, to the point that both the Bank of England and the previous government have brought in regulations to cool prices.
Despite these strong market conditions, major political events often kick off a period of uncertainty. Here, we take a look at what’s likely to happen to house prices in the run up to the election.
How does a general election affect the housing market?
You may have heard that transactions tend to ease off in the build up to a general election, as buyers and sellers wait to see the outcome.
Spring also tends to be a particularly busy period for the UK housing market, with the number of sales often climbing from February through to June.
The table below shows the number of transactions that took place in the UK each year (according to Land Registry data), with election years 2010 and 2015 highlighted in red.
* Results for March 2016 are heavily affected by changes to stamp duty for buy-to-let investors
The data shows that transaction levels slumped just before the 2015 election on May 7, before recovering to the expected level in June.
As you can see above, while the run up to an election often has some effect on how many houses are sold, it’s not usually particularly significant.
What will happen to property prices?
In all probability, very little – property prices have tended to remain resolute in the face of previous political changes.
Ahead of the last general election in 2015, the UK’s average property price continued to rise steadily each month at around about the same level as in 2014 and 2016.
Will a snap general election make any difference?
If anything, it’s likely to have less of an effect on house prices than a standard general election.
With only six weeks to go until polling day, there will be much less time than usual for any hesitancy to build.
It’s also worth remembering that political uncertainty has become the norm recently – and that last year’s referendum on leaving the EU had little effect on the residential market.
How will the election result affect the property market?
It’s too early to tell, as parties have not yet released the full details of their policies.
With the proposed ban on letting fees now unlikely to come in to force until next year, continued debate over stamp duty reform and full details of the first starter home schemes yet to emerge, it promises to be an interesting year for the property market, no matter which party wins on election day.