Property Market Holds Steady Despite Election Uncertainty

The property market has shown resilience this June, maintaining momentum despite tentative movements at the upper end according to the latest Housing Index by Rightmove. They report the average price of property coming to the market for sale has decreased by a mere £21 (0.0%), settling at £375,110 after reaching a record high in May. This stability follows the familiar seasonal pattern observed in recent years. While less expensive and more northerly regions experience stronger price growth, with five of the six cheapest regions hitting new price records, the higher-priced East of England and London lag behind.

Key Market Trends
Regional Price Growth
The divergence in property price trends across Great Britain is notable. The northern regions and less expensive areas are seeing robust price growth. In contrast, the West Midlands and London, which typically command higher prices, are experiencing a slowdown. This discrepancy highlights the varied nature of the property market, influenced by regional economic conditions and buyer demographics.

Election Impact on Market Activity
The announcement of a General Election has introduced a degree of uncertainty, yet the overall market activity remains largely unaffected. Rightmove's data indicates that the number of sales agreed upon and buyer enquiries have remained steady, reflecting a strong market momentum. According to a poll of over 14,000 individuals, 95% of those planning to move home stated that the election would not alter their plans.

Tim Bannister, Rightmove’s Director of Property Science, notes, "It’s always difficult to predict how home-movers will react to sudden uncertainty, but looking back through our data, we can see that during previous election campaigns, market activity has remained largely steady. This election has followed a similar pattern so far, and the responses from our poll support the data."

Discretionary Sellers and Market Hesitancy
However, the election has had a slight impact on the number of new sellers entering the market, particularly at the discretionary top end. In the past two weeks, the number of new top-end sellers has decreased by 3% compared to the same period last year, reversing an 11% increase observed in the previous two-week period. This hesitancy is understandable given the greater flexibility these sellers have regarding the timing of their property sales.

Mortgage Rates and Affordability
High mortgage rates continue to stretch affordability for many potential buyers. The average five-year fixed mortgage rate has risen to 5.04%, up from 4.94% in January. Many prospective buyers are closely monitoring the Bank of England for potential rate cuts, which could significantly impact market confidence and affordability.

Housing Policies in Election Campaigns
Housing has become a focal point in the election campaigns, with various parties proposing policies aimed at addressing the housing crisis. However, many of these pledges are either continuations of existing schemes or targeted at specific market segments. The timing of Bank of England rate cuts is likely to be of greater concern to most homebuyers than election promises.

Tim Bannister adds, "Some of the housing proposals announced are a good start with positive intentions, however they could go further in supporting the majority of first-time buyers or helping people in different circumstances to move. 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."

Despite the political uncertainty brought about by the upcoming General Election, the property market remains resilient. Regional variations in price growth and a slight hesitation among top-end sellers are the only notable changes. With mortgage rates still high, many are looking to the Bank of England for relief. As election campaigns unfold, it is crucial for policymakers to focus on sustainable housing solutions that benefit the broader market.

Feel free to reach out with any questions about how these developments might impact you at movinghome@mchugohomes.co.uk.
P.S. Check out the value of your home in an instant HERE