House Prices Election Update

Cheaper properties and northern regions maintain asking price momentum

Less expensive and more northerly regions are leading the charge in asking price growth with five of the six cheapest regions reaching new price records while the higher-priced East of England and London lag behind, latest data from Rightmove reveals.

Prices have continued to flatline after reaching a record high in May with the average price of property coming to the market dropping by just £21 (0.0%) to £375,110.

Buyer demand has also remained stable and is now 5% higher than last year supporting earlier evidence that most people planning to move home will not let the July 4 election get in their way.

ELECTION CAUTION

According to Rightmove the majority of buyers and sellers have continued their plans since the election was called, with the only sign of election caution being a slight drop in the number of new sellers especially at the typically more discretionary top-end of the market.

However, stubbornly high mortgage rates continue to stretch affordability, with many future movers likely to have a closer eye on when the first Bank of England rate cut might be, rather than pre-election housing market promises.

Tim Bannister, Rightmove’s Director of Property Science, explains: “It’s always difficult to predict how home-movers will react to sudden uncertainty, but looking back through our data, we can see that during previous election campaigns, market activity has remained largely steady.

“This election has followed a similar pattern so far, and the responses from our poll of over 14,000 people also supports the data, with the vast majority of respondents saying they will carry on with their home-moving plans.”

WATCHING AND WAITING

But he cautions: “However, some potential sellers appear to be watching and waiting rather than taking action, evidenced by a dip in the number of new sellers coming to market, particularly at the top-end. This is understandable when many of these sellers have more flexibility over when they act, but overall, it appears to be business as usual for the mass-market.”

One area of activity that does appear to have seen some impact from the election being called is the number of new sellers coming to market with the overall number of new sellers coming to market is just 1% higher than the same period a year ago.

And housing has also started to play a bigger role in the election campaign, with a flurry of manifesto pledges shared in the last couple of weeks.

MANIFESTO PROMISES

Banister says: “It has been encouraging to see housing get more attention, however, many manifesto promises so far are continuations of existing schemes, revivals of old policies, or ideas which are only likely to help very specific parts of the market.

“The timing of Bank of England rate cuts is likely to be of greater concern than manifesto housing promises to the majority of home-hunters.

“Mortgage rates remain stubbornly elevated, with the current average five-year fixed rate now at 5.04%. While this is improved from the peak of 6.11% in July 2023, it is still higher than the beginning of the year when it was 4.94%.

“At the start of 2024, many will have been expecting, or at least hoping, to see some significant falls in mortgage rates by the halfway point of the year.

“If a Bank of England Base Rate cut can lead to lower mortgage rates, it will have a much wider and immediate impact on the market than the bespoke housing policies announced so far.”