Posted: Friday, June 28, 2024

How will the UK general election impact the property and financial markets?

With the UK general election approaching on Thursday 4th July 2024, we look to a panel of industry experts to determine what the impact could be on the property and financial markets:

Property market resilience amid election

Since the election was called much earlier than expected, many are optimistic that there will be more certainty for the future at an earlier date. While a surprise election could cause uncertainty, in this instance there has been little impact on the property industry as there has not been a prolonged build up to the event. Many etsate agents across the country have reported an increase in business during this period, indicating a robust market. While there may be future implications related to taxation, the immediate effect is that the market is showing resilience.

GBP and currency markets

From a currency perspective, Jonathan Watson, currency specialist at currency broker Lumon advises that the market has not seen major changes in the run up to the election, and there is not much anticipation for a seismic shift after the result. Despite historical trends showing a weaker Sterling in the run-up to elections due to uncertainty, the pound has recently been strengthening. Watson attributes this to the closely aligned economic policies of the major parties, which have mitigated potential market fears. 

Interest rates and inflation

In regards to interest rates and inflation, Watson notes that while headline inflation is within target, services inflation remains high. He says: "Services make up 80% of the British economy and that’s still running much higher than expected. A change to Labour government is not going to change the position on interest rates, perhaps not too materially. Some of the things they might do that are pro-growth could actually cause inflation to be a bit more of a stickier issue for the Bank of England. So, I know we certainly want to see those interest rates coming down, but perhaps not quite as fast as that headline number would suggest." He notes that the Bank of England is cautious about making rate cuts too soon to avoid reigniting inflation.

Mortgage and financial advice

The market has shown stability despite the impending election. James Oliver, independent financial adviser from Strategic Solutions explains: "Generally, with a general election, you tend to find people want to just sit on the fence and wait and see what's going to happen. It's not really been the same this time around. If we see a Labour win, I don't envisage any major changes very quickly because the last thing markets want, whether it be currency markets, mortgage markets or the housing market, is surprises or aspects that are not priced in, as we saw with Liz Truss."

Mortgage Guarantee Scheme

Oliver believes that rates cuts will have more of an impact on stimulating the market than mortgage guarantee schemes: “The reality is what will stimulate the first-time buyer market is cheaper borrowing costs. You can do 100% mortgages, it doesn't mean that people are going to start buying again. But I think the reality is when you start to see some rate cuts, you will see things start to move again and everything's intertwined, whether it's personal debt, whether it's car finance, whether it's mortgage borrowing, a reduction in rates, is going to stimulate all of that. If you'd asked most commentators earlier on in the year what they thought would happen by halfway through the year, we were probably pricing in anywhere from four to six to base rate cuts. Now I would be surprised if we get anything more than two or fifty basis points cuts this year because I think the Bank of England is very concerned about inflation coming back to bite us. This week, Barclays, one of the biggest lenders out there cut rates, and generally you see the rest of the high street follow when you see a few big players do that." 

Buy-to-let market

There are challenges faced by landlords due to high borrowing costs and regulatory changes. Oliver explains that the biggest impact from a pure investment perspective over the last two years has been the increasing of interest rates and what that's done to the potential return that a landlord is going to see on their investment. 

Building targets

Whilst housing policies from the government have been unstable, having seen 15 different housing ministers within the last 12 years, there is a clear need for more houses within the UK, and so new builds are valuable. However, it is important to note that people want to move to areas where there are ample jobs and amenities, and in order to drive investment, there is a need for stable environments. 

Non-dom status

Labour's proposal to abolish non-dom status could impact the housing market by potentially increasing the number of properties for sale. Potentially, higher taxes on these individuals may lead to more properties being listed. However, the impact of this would be more significant in central London as opposed to on a national scale, given the small number of affected individuals. Only about 0.1% of the population has non-dom status, implying a limited overall effect.

 

Contact us  

Do you need guidance on your next move? Contact your local Guild Member today. 

 

Looking to buy?

Looking to buy?

We'd love to help you on your journey home.
Don't miss out on on the latest properties by registering for our property alerts.

Register with us today

Read What Our
Customers Say

I can't speak more highly of the team at Homesearch. When I met Michael to discuss the sale of my home instantly from that meeting, I could tell how knowledgeable they were. From that moment until closing, everything went absolutely flawless. This experience of selling went without a hitch with them giving great tips on preparing my home for viewings. Thank you. I really appreciate all your help during this process. I highly recommend Homesearch to any person who is looking to sell their home or buy a new home.

Loretta Barrett, Seller

I started with two very well known real estates, but I hated it. I was simply another number to them and I didn't feel they were honest and transparent. With HomeSearch I felt comfortable that they were on my side and they were always available to help. The process is hard enough, so having a team who supports you can make such a difference. Highly recommend.

Arian Barvarz, Seller

The reason we chose Homesearch to sell our property was that we liked the straightforward, no-nonsense approach of both Anna and Michael. They gave an honest appraisal of our property and a clear idea of what we could expect to sell it for. In fact, the offer we accepted exceeded our expectations. The sale took longer than we would have liked, due to delays caused by the buyers' solicitor, but Michael was tenacious and must have worn his phone out keeping everyone informed of progress.

Nicola Watson, Seller

Homesearch are hands down the best agent I have ever worked with ! The team helped me in an extremely complex sale. Without the knowledge and experience of the whole team, my sale would not have completed. I dont normally write reviews, only when they are truly deserved. An exceptional team! Very kind and personable, reliable & trustworthy.

Leslie John, Seller

My experience with Homesearch is that they are professional, friendly and go above and beyond to ensure that something stressful like selling a house runs as smoothly and stress free as possible. They work hard to get the results and have kept me updated throughout the process. I honestly could not recommend them enough, they are easily the best company I’ve dealt with in the buying/selling houses field. And to top it all off, they always answer the phone in the most pleasant tone and always provide service with a smile.

Chanelle Hunte, Seller

Homesearch are PROFESSIONALS. I sold my property through Homesearch and I have not dealt with a more competent agency. Every single person  dealt with knew exactly what they were talking about and I can tell that they all have knowledge in the industry and were not just picked up from the street. From the get go I was impressed and I will certainly do business with them again.

Paul Hobbs, Seller

Many thanks Homesearch for locating professional corporate tenants for my property. I am very happy with your property management service as you always ensure that the tenants give the property back in good order at check out. Five Stars!

Maria Foran, Landlord

I have been absolutely delighted with the exceptional service I have received from Homesearch. They have removed all the stress & hassle of renting my property and dealt with all manner of situations I would have struggled with in such a professional & courteous manner. They give valuable unbiased advice with such a wealth of experience. Nothing is ever too much trouble for the staff, who are always friendly & helpful. Homesearch let and managed my property and I am very happy with their property management services, they are very knowledgeable.

Paula Carter, Landlord

Homesearch always do what they say they will do. They are efficient and raise any issues early and provide options to resolve them. Homesearch is very  easy to get hold of and talk to, no matter where I am in the world! My property is well looked after, regarding tradesmen, replacement of items swiftly etc. with the minimum of fuss.

David Connells, Landlord

From our first viewing right through to the present, Home Search were brilliant. They helped make the whole process quick and stress free and even now we are in and settled, they are still happy to assist us with any queries we may have. We couldn't recommend them highly enough.

Julie Maney

Home Search helped us move into our new flat smoothly and Tim was always happy to provide help to put our nerves at ease. Arranging a viewing was easy and Home Search were happy to open after hours for us to sign the paperwork. They were very helpful and often would offer to help! Having moved in we received a lovely card and they have always been swift in communicating with Usif we have any questions. Would recommend it.

Will Houghton

Michael and his team were simply amazing!! They helped us to find the perfect house, offering a nice and attentive service from the beginning through to the end. Thank you so much!! 5 stars service. Highly recommended!!!

Giordana Sicali

Very helpful and friendly staff. Tim, Michael and the team Made the whole renting experience easier.

Amol Sinare

I had a very difficult situation as I did not have a guarantor and my dad was earning enough but was not a homeowner. It took a about 3 weeks but Michael sorted it all out in the end and my dad became my guarantor. I got a lovely home and all the staff were very helpful including Paris, Zainab and Tim. Thank you all very much! Would recommend them to anyone

Misti Chakraborty

On behalf of myself, Noa & Niamh, we would like to start off by saying a massive thank you for the amazing service Home Search Ltd provided us with, especially highlighting the work of Clorissa. Within a week we were able to sign, seal and move into the property that we looked at, all down to Clorissa's prompt and effective work ethic, which allowed us a smooth transition from one property to another, without her, this move would not of been possible to have happened within the time stamp that it did. We are very grateful for the work that was done by Home Search Ltd, highly recommend.

Lewis Francis
How Much is Your Property Worth?

Expert Valuation

We always come armed with evidence and statistics of why we are pricing your property a certain way. We know the importance of getting the initial price of your property right, first time. With our extensive experience we will also explain current market conditions as we want to get our sellers the best price.

What's more, get a free gift with your free expert valuation with one of our experienced Valuer's.

Book a Valuation