How the UK General Election Could Impact the Housing Market in 2023

British Prime Minister Rishi Sunak’s Announcement of Early Election Boosts Confidence in Housing Market

In a surprising move, British Prime Minister Rishi Sunak has announced that the country will head to the polls on July 4th, setting the stage for a potentially game-changing election. This election is expected to see Sunak’s Conservative Party potentially ousted for the first time in 14 years, with the opposition Labour Party gaining ground.

While the news may initially breed some short-term uncertainty, real estate industry experts are optimistic about the election’s timing and its impact on the housing market. Kate Eales, deputy head of residential at Strutt & Parker, believes that the short six-week window before the election will benefit the market. She states, “Those who have been leaning on a ‘wait and see’ attitude can now proceed with confidence as, regardless of the election result, the remainder of the year will deliver a busy market fueled by those who have been sitting on their hands, and a more buoyant economy.”

In May, the average price of new listings in the U.K. hit a record high, showing a steady increase from the previous month and year. The market remains “price-sensitive,” according to data from online property portal Rightmove.

The timing of the election is expected to have a positive impact on the housing market, with Edward Heaton, founder of buying agency Heaton and Partners, stating, “It will be fascinating to see whether buyers are willing to commit to a purchase in the next couple of months, and I suspect some of those that are could be rewarded with more favorable terms than they might otherwise have expected.”

Additionally, the Bank of England’s decision to hold interest rates steady at 5.25% but potentially cut them as early as next month has further fueled optimism in the market. Both Goldman Sachs and BNP Paribas predict that the central bank will begin cutting borrowing costs in August, which could have a significant impact on the housing market.

Overall, industry experts advise buyers to act now before the election on July 4th, as they may benefit from lower interest rates and potential appreciation in property values. While some uncertainties may linger, the housing market is poised for success in the second half of the year, regardless of the election outcome.