What impact could the 2024 UK General Election have on the UK property market?

As the nation gears up for a general election on July 4th, many property buyers, sellers and investors are wondering how the outcome might influence the UK housing market. While general elections can create some short-term uncertainty, historical data suggests their impact is relatively muted compared to broader economic factors. However, the policies of the next government could shape longer-term housing trends.

Here's what to expect:

Short-Term Impacts Likely Limited

Analysis by Nationwide Building Society found that general elections typically do not cause significant volatility in house prices or alter prevailing market trends in a major way. Their research showed housing market activity, including mortgage approvals, has remained stable around recent elections.

Rightmove's data tells a similar story - in the run-up to the 2015 and 2019 elections, buyer demand was strong and continued rising after the votes. A full 95% of prospective buyers surveyed said the 2024 election would not impact their plans to move.

This aligns with the view that most buyers are motivated by personal factors like changing jobs, growing families or downsizing rather than short-term political events. Unless an election triggers a broader economic shock, its direct effect on the property market is usually limited.

Post-Election Bounce Possible

While the election itself may not derail the market, there are some historical precedents of a "post-election bounce" once the uncertainty clears. Rightmove found demand surged 18% annually in June 2015 and 14% in January 2020 after those respective elections.

A similar bounce could materialize in late 2024 if the incoming government is seen as providing stability and a clear policy direction. This perceived certainty could release some pent-up demand from buyers who took a "wait-and-see" approach during campaigning.

Longer-Term Impacts Hinge on Policies

Of course, the true long-term impact depends on the winner's policy platform regarding housing, taxes, regulations and broader economic management. For example, Labour's ambitious homebuilding targets could gradually improve supply and affordability, though the effects may take years to materialize.

On the other hand, tax policies from either party aimed at real estate investors could influence demand and trigger market shifts in specific segments like buy-to-let. Overall economic stewardship impacting employment, inflation and mortgage rates will also be crucial.

For now, buyers and sellers need not panic about any immediate market disruption from the election cycle itself based on past trends. However, it's wise to follow the winning party's policy announcements closely, as they could reshape housing landscapes across the UK in the years ahead.