Prime Minister Rishi Sunak has called the General Election to happen on July 4th, a lot sooner than most people predicted. But what does that mean for people who are in the process of buying or selling their house?
Should you act fast or should you wait? Compare My Move has looked into how house prices react to general elections, and how they will react to the upcoming 2024 General Election.
Here is an overview of the key points found from this data:
- House prices tend to rise in the 12 months immediately after a general election, by an average of 4.6%
- On average, house prices rise by 1.1% more under a Labour government than a Conservative government.
- House prices rose the most (8%) 12 months after the 2015 General Election, in which the Conservatives and David Cameron won a majority.
- 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.
On average, we see a 4.6% rise in house prices in the 12 months after a general election and therefore we will likely see house prices continue to rise after the 2024 General Election. House prices have already started to rise again after a consistent drop in 2023, currently being up 0.8% year-on-year and are continuing to rise, alongside a drop in inflation, which will herald a base rare reduction very soon.
However, while the average state of house prices 12 months after a general election is positive, the specifics of the election can impact house prices. 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.
“Stability is crucial to a beneficial property market, and a hung parliament will affect the stability to an extent. However, this doesn’t necessarily mean that house prices will fall as they did after the 2010 General Election, they could just rise more gradually than if we had a majority, as we saw in 2017.”
Dave Sayce, Managing Director and Founder Compare My Move said, When it comes to parties, governments with a single-party majority have been the only governments that have produced rises in house prices since 2005, with the coalition between the Conservatives and the Liberal Democrats seeing a reduction in house prices in the 12 months following the election by 2%.
On average a Labour majority has seen a higher rise in house prices than a Conservative majority at 7.1% to 6%, despite the 2015 General Election seeing the highest house price rise 12 months after an election, with house prices rising 8% after David Cameron won the Conservatives the majority.
“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 parliment. 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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