With the general election fast approaching, new data reflects how house prices change depending on the party in government. Here, we discuss what this could mean for the housing market in July.
The general election is “likely to stall the pace” of purchase transactions, according to Richard Donnell, the executive director at Zoopla. With this slowdown in activity, we may see completions fall short of Zoopla’s predicted 1.1 million for the year. However, it’s unlikely that this election will impact the housing market as significantly as we have seen in previous years, as there’s “not a huge divide in policy between the two major parties”.
Furthermore, data from Compare My Move looks at house price changes after the last seven general elections. The report shows that house prices rise by an average of 4.6% in the 12 months immediately after an election.
Interestingly, there’s a slight difference in how each party impacts this rise in house prices. On average, a Labour government sees a slightly larger rise, with house prices growing 1.1% more than under a Conservative government.
The data goes on to show that house prices rose the most, by 8%, in the 12 months after the 2015 general election, when David Cameron’s Conservative campaign won a majority.
However, the data shows there are even more intricacies to an election that impact house prices.
What impacts house prices the most?
Compare My Move states, “One of the biggest factors of an election regarding house prices that we have seen since 2005 is whether or not the winning party has won by a majority. When a party wins by a majority house prices rise on average 6.9% more than if the election ends on a hung parliament.”
Moreover, house prices rise an average of 7.4% when the general election ends in a majority, compared to only 0.5% when ending in a hung parliament.
The managing director of Compare My Move, Dave Sayce, adds, “If you are thinking of selling your house then you could make an average of 6.9% more on your house price as the opinion polls are not predicting a hung parliament. However, there is no knowing how house prices will change, even when looking at previous elections, and as we have seen, house prices could go down as well as up.”
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