A Time For Change In The Property Market?

Posted by Greenslade Taylor Hunt on 11th July 2024 -

Samuel Powell, Residential Manager in our Ilminster office gauges the effect of the General Election on the property market and helps to answer some frequently asked questions from both sellers and buyers. 

 

The housing market has had its fair share of ‘ups and downs’, not least in recent years where the arrival of Covid to the UK meant a mass exodus from city living to country life. Mortgage rates were low and house prices soared. 

 

So, what has happened in the last year? 

Unfortunately wars continue to rage, the increased cost of living and economic unpredictability created an uncertain market and outlook for 2024. It was reported earlier in the year that the number of sales falling through had risen and sellers were being cautious about listing their property with so little property to buy onwards, as well as mortgage rates remaining ‘high’.

 

As we entered the spring however, there was a new found confidence in the market as more sellers listed their homes for sale and for the first time in several years the property market became far more the traditional, seasonal market of old. More choice saw a new wave of home buyers registering, with many keen to make a long-awaited move. 

 

The months of April and May continued in the same manner, save for some quieter weeks in the lead up to the election, which was not unexpected. 

 

What can we expect next, post General Election?

With the outcome of the election now decided we very much anticipate ‘business as usual’ in the property market. Historically, the property market tends to pick-up somewhat after an election, likely the result of a collective ‘holding of breath’ before the outcome is known. 

 

With the summer months now upon us, more properties coming to the market and several months of buoyant selling time ahead, we anticipate plenty of viewing activity and sales to be agreed, with those listing in the summer still able to complete a transaction this calendar year.

 

Will interest rates come down post-Election?

There are rumours that the Bank rate may come down slightly from August which will hopefully lead to the reduction in borrowing rates, good news for homeowners and for those looking to get onto the property ladder. We will have to wait and see if this materialises but in the meantime our advice is that buyers should continue to budget carefully to comfortably pay their mortgages and sellers may well have to be more realistic on the current value of their homes. 

 

Will property prices increase?

It is fair to say that we have returned to a traditional market with a greater focus on the market value and a longer period of time for sales to be agreed. That said, this is the norm rather than the unprecedented, and spring sales have been buoyant. There has also been a shift in prospective purchasers’ buying positions since the beginning of the year, with more buyers being ready to proceed immediately with a purchase.

 

What does the new Labour Government mean for the property market? 

It is of course early days for the new Labour leadership and the party is unlikely to announce its major political statements and first budget until early autumn. What this means for the housing sector is still unclear until these announcements are made. However, Labour’s election manifesto gives an insight into what can be expected. 

 

Labour has pledged to develop 1.5 million homes over the next five years, to reform planning rules and to focus development on brownfield and “grey belt” land. This is a newly created category which constitutes green belt land, deemed to be unsightly or of low quality, with any housing scheme built on this category of land, required to target 50% affordable housing. 

 

Another aspect within their party manifesto was to introduce a permanent ‘Freedom to Buy’ mortgage guarantee scheme, aiming to assist those who struggle to save a larger deposit to secure a mortgage and get onto the housing ladder. However it has been confirmed that the Stamp Duty threshold will be lowered back to £300,000 from £425,000 for first time buyers. 

 

Now that the election has concluded, it is hoped that the strong majority with which the new government has been chosen will translate into more certainty and boost confidence, both in the housing market and within other UK markets. 

 

There will always be a demand for property, despite the rise and fall in prices but here’s to the hope of more stability in the latter half of 2024 and beyond. Whatever the political landscape, there are always personal reasons to move – growing families, an emptying nest, relocating due to work and a host of other reasons.

 

So, whatever your circumstances, if you are considering selling your home, speak to our local property experts who would be delighted to assist.

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