UK house movers undeterred by election, data reveals
House movers in the UK have been undeterred by the calling of an election, with 95% of those planning to move sticking to the plan, according to new data from Rightmove (RMV.L).
“Previous elections would indicate we may be set for a particularly strong summer once the election is over, especially if interest rates start to fall," said Tim Bannister, Rightmove’s property expert.
"However, every election is different, and it would depend on whether any significant housing policies are also introduced, so we’ll need to wait and see what happens to have a better view of activity for the rest of the year.”
Analysis of year-on-year buyer demand changes around the 2015 and 2019 elections also highlights steady activity in the lead up to a vote.
Demand is measured by the number of people sending enquiries about properties for sale on Rightmove's website, and year-on-year change has been used to remove the usual seasonal peaks and troughs in the market.
Read more: What does the UK general election mean for your finances?
In the two months leading up to the May 2015 election, buyer demand increased by 5% year-on-year in March, and by 6% in April. During the election month demand increased to 9% year-on-year, with the increase moving to 18% up in June, as the market benefitted from a post-election boost.
In 2019, buyer demand remained stable in the months before the election, increasing by 1% year-on-year in October and 4% in November. During the election month in December, demand was up by 13% year-on-year, followed by a 14% increase in January 2020.
Whether or not people change their real estate plans will depend heavily on what the ruling party will roll out post-election and the direction of interest rates. There have not — so far — been any market moving announcements with respect to the housing market by either Labour or the Conservatives.
In recent years one of the most significant policies guiding the market came in the form of the stamp duty holiday, designed to boost the housing market during the COVID pandemic, which spurred on the market to new heights.
Mortgage rates and inflation
While interest in the housing market appears to be steady, challenges persist for buyers and those looking to get a mortgage or re-mortgage. Interest rates have been on pause at a 16-year high of 5.25% since August last year, a factor causing considerable uncertainty.
While mortgage rates eased dramatically at the start of the year as hopes of imminent rate cuts soared, they have undergone a reprice in recent weeks amid market revisions over the magnitude and timing of cuts.
Read more: The tax pledges to watch for in the UK election
Estate agent Savills said it expects house prices to rise by more than £60,000 over the next five years as Britain’s mortgage crunch eases.
The estate agent significantly upgraded its five-year forecasts for the housing market, citing an “improved economic outlook”.
"The incentive to move remains for many households — in particular for first-time buyers who are escaping rapid growth in rent costs, and upsizers who delayed moving last year when mortgage rates increased," said real estate platform Zoopla in a recent market report.
Watch: How much money do I need to buy a house?
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