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How will the general election affect the property market?

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With the snap general election just under a month away, many people have been asking me how both the election itself and the potential outcomes will affect the UK’s property market.

In the immediate aftermath of Theresa May’s shock announcement on April 18th the market braced for a period of uncertainty, the norm when faced with major political upheaval or events. Historically speaking, buyers and vendors appear to wait until a result is called before deciding on their options and in result leads to a slowdown in transactions and the market becoming sluggish in the 6 week run up to an election. This is in contrast to the usually busy period the market experiences in spring, with sales climbing from February through to June. Now is this just hearsay or a factual phenomenon? Well, let’s have a look at some figures around 2015’s general election:

 

 

February

 March

 April

 May

 June

2013

54,216

66,119

62,585

80,067

80,094

2014

79,868

84,028

88,332

97,353

100,789

2015

72,056

83,114

81,006

92,437

103,794

Total Transactions; Source: Land Registry

With 2015’s figures highlighted in red, we can see that transaction levels slumped just before the 2015 election on May 7th before then recovering again to the expected level in June. So while an election run up certainly does have some effect on the level of property transactions undertaken, it is not usually significant enough to worry the market or economy as a whole.

But what will happen to property prices I hear you ask? Well, in all probability, very little. Property prices have tended to remain steadfast in the face of previous political changes. Let’s not forget that prior to last year’s EU referendum, we were told that the residential housing market, would collapse within minutes of a winning vote for the “Leave” campaign. And yet figures show that the property market actually felt very little effect.

Ahead of the 2015 general election, the UK’s average property price continued to rise steadily each month at around the same level as the previous year and then continuing afterwards throughout 2016.

 

 

February

March

April

May

June

2014

£178,921

£179,537

£183,532

£185,476

£187,077

2015

£190,827

£191,537

£193,225

£195,313

£196,802

2016

£205,584

£207,333

£208,705

£212,191

£215,182

Avg. House Price: Source: Land Registry

So is this snap election going to make any difference? Well, if anything, it’s likely to have less of an effect on house prices than a standard general election. With only a 6 week build up from announcement to polling day, there is much less time than usual for any hesitancy to build.

So how will the result, whatever it may be, affect the property market? Well, it’s sadly still too early to tell, as at the time of writing this article, the parties have not yet released the full details of their respective policies. With the proposed ban on letting fees now unlikely to come into 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. Whatever the result may be, the figures don’t lie and if you’re considering selling your property, “spring” into action, “snap” to attention and call Centrick Property now to book your free market appraisal and ensure that your property ”wins” no matter the result…

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