The impact of the UK General Election on the housing market

It's almost impossible to have missed the news that the United Kingdom has finally entered into the stage fierce campaigning in preparation for the General Election that has been confirmed as taking place on 4 July 2024.

Whatever the hue of your personal style of politics, there will inevitably be much tubthumping from each party as they drive home their promises, while taking time to rip their opponents' planned policies to shreds. This is so much politicking and par for the course for any government that will either continue as we are or change once all the votes have been counted and verified across the whole country.

The latest YouGov polls on voting intention (25 May) show that Labour is way out ahead with a 44% voter statement in comparison to half that (22%) for the Conservatives. If the results of the recent local authority, police leadership and mayoral elections are anything to go by, this seems to be an accurate reflection of the country's political preferences. 

In addition, studying the 1997 General Election results, this sequence of events, while not exactly mirroring what went on then across the country, is drawing parallels nevertheless - the practical result if that is true is that Labour will be winning the right to govern by a landslide.

However, irrespective of the results, for those wanting to sell and/or buy their homes, the question arises as to what the impact on those buying and selling property is likely to be leading up to the election and afterwards.

In truth, the length of time before the result of the election is known is so short (five weeks at the time of writing) that there is unlikely to be any significant impact on either the process or on the financial activities (mortgages, insurance, etc.) involved.

The financial markets may react according to the general feeling about the potential winner of the election, particularly where a mooted policy creates a seismic hit on the country (think Truss's short-lived premiership), but this is unlikely to be the case since, for the most part, the main parties are reasonably aligned on economic policy; they simply differ on the methods to reach those goals.

It could be the case that those who are only just embarking on the sale or purchase of a property at the time of the announcement of the General Election date might decide to hold off progressing the transaction until after the dust has settled a bit. This decision-making, if it is sufficiently broad, may have a depressing effect on the housing market, but it is likely that this will pick up after the election, too.

Those who are already a fair way through the transaction of buying and/or selling a property will almost certainly want to see the process through to completion.

Analysis of the two main parties running for controlling the government shows that they are looking at similar aspects of housing policy. How they achieve that and how they plan to finance the policy (should it ever come to fruition, of course) differs between the parties - this is only to be expected, given their overall guiding principles.

As far as housebuilding is concerned, both parties are clear that more housing is required throughout the country. In the previous election in 2019, one of the Conservative manifesto policies was to build 300,000 homes by 2025, although this has been weakened over time and obviously will not have been achieved (mainly because of resources and cost of materials from a building standpoint). Labour has stated that it wants to build 300,000 every year if and when they come to power.

It is quite an alarming statistic that UK house prices have increased by 14 times the price achieved in 1980. This puts first-time buyers in a terrible financial position, making it increasingly unlikely that they can step onto the property ladder for several years, not helped by the highest rental prices swallowing up any funds they might have for a deposit, and then being unable to pay mortgage rates on a high residual amount. To help, the Conservatives have suggested that they might re-introduce a scheme similar to Help to Buy process in the recent years, while Labour are looking at ideas that include a mortgage guarantee scheme. 

Both parties are keen on sorting out the huge shortfall in social housing availability, although Labour has stated that it wants to end the right-to-buy scheme. Because of the scheme's intentions, inevitably it reduces the social housing stock available.

One of the problems in areas that are popular with tourists is that they are a premium target for those with the money to buy a second home or to convert them into short-term lets, which has a negative local impact since because house prices are pushed artificially high - and they are also empty in the less popular months, meaning the townspeople are impacted by the draining of the local economy during that time. Both parties are looking to apply some sort of regulation on second homes and short-term lets to help the local property market.

While the Conservative Government has reduced the Capital Gains Tax payable on property sales in its current governing period, Labour has no stated plans to increase it again in their manifesto.

A recent survey of 14,322 people on behalf of Rightmove showed that around 19 in every 20 potential home-movers were not going to be swayed by either the election result or the electioneering leading up to it.

Furthermore, analysis of the homebuying activity leading up to the previous two elections (2015 and 2019) highlighted steady activity, indicating that homebuyers are not impacted by the politics that swirl around these elections.

The natural assumption then is that, if buyers are undeterred by the election promises and counter-promises, any plans to buy a new property will likely go ahead over the period, and that prices are largely unaffected.

If you have any concerns about what is happening in the housing market and whether that will impact the asking price of the property you are looking for, you can talk to your estate agent or your assigned conveyancing solicitor.

Looking for a quality conveyancer with a firm eye on the cost of the service provided, with a “No Completion, No Fee” guarantee (even if your buyer or you pull out as a result of the Election)? 

That's where Homeward Legal can really help with affordable but quality conveyancing services! 

They will start work on your planned purchase (and/or sale) as soon as you agree to the quotation and appoint them to represent you. 

Homeward Legal will also provide a quote that will not change - what you are quoted is what you pay for standard conveyancing process.

There are some unforeseen items that might arise during the purchase and/or sale, but the solicitor discusses these and their cost as they come up. 

In addition, to protect the homebuyer further, Homeward Legal operates a ‘no completion, no fee' promise, which ensures that, should the purchase or sale not go through as planned to completion status, no payment is required.

Call  to get your conveyancing quote started, or to discuss your concerns with your plans to move.

Or you can get a quick quote, using Homeward Legal's easy-to-use quote generator.