Should property buyers and sellers pause their plans ahead of election – or is it best to push on?

For those looking to buy or sell a property, the news of a general election on July 4 may, at first glance, appear to throw their plans into disarray.

Elections usually lead to some stalling in market activity as buyers and sellers put their plans on hold until they know what housing policies are going to be introduced by a new Government.

They also tend to be followed by a ‘market bounce’ where pent-up demand is released, and everyone who has previously held off springs into action.

However, like the surprise announcement of the election date itself, will the housing market respond in a more unusual way this time around?

Effects: Elections usually lead to some stalling in market activity as buyers and sellers put their moving plans on hold

Some experts suggest there are factors that may have a much bigger influence on buyers and sellers, and the decisions they make – for example, the pace and scale of interest rate cuts.

A predicted summer interest rate cut may prompt buyers to take action rather than hold off for the outcome of the election.

We asked some leading experts in the housing market for their views about what impact this election announcement will have on buyers and sellers.

Richard Donnell, of Zoopla, suggested that it may well depend on how far down the line you are in the selling or buying process.

And there is also the issue of personal circumstances and how motivated buyers and sellers currently are.

For example, you might be a first-time buyer who wants to stop paying record high rents.

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Experts have suggested that the election won’t have as big an impact on the housing market as in previous years

Mr Donnell said: ‘The announcement of the general election for July 4 is earlier than may have been expected. Elections normally lead to some stalling in market activity.

‘This general election period will run over the early summer period when market activity tends to tail off.

‘The housing market has been recovering with rising sales volumes and more homes coming to the market for sale, a sign of growing confidence among sellers even though mortgage rates remain at 4.5 per cent to 5 per cent.

‘There are 392,000 homes in the sales pipeline working their way through to completion over 2024. This is 3 per cent higher than this time last year and we don’t expect to see buyers already in the process of working to sales pulling out.

‘The impetus to move remains for many households, in particular, first-time buyers escaping the rapid growth in rents in the private rented sector and upsizers who delayed moving last year when mortgage rates moved higher.’

Delaying decisions

However, Mr Donnell said that the election announcement could slow down the sales process for some.

‘The election announcement is likely to stall the pace at which new sales are being agreed in the coming weeks as we run up to the start of the summer slowdown. Most buyers well into the home buying process close to agreeing a sale will ideally want to push through and agree to sales now,’ he said.

Overall, we don’t see the election having as big an impact as in previous years

‘Those who are earlier in the process may look to delay decisions until the autumn after the election is over.

‘Overall, we don’t see the election having as big an impact as in previous years, particularly as there is not a huge divide in policy between the two main parties and with few specifics on housing other than a focus on reforming the private rental sector and boosting housing supply.

‘However, sales completions over 2024 may now fall slightly short of the 1.1 million we expected for 2024.

‘What businesses and landlords will want to see from all political parties are concrete plans for how we can boost housing supply across all tenures while getting the right reforms to the private rented sector to ensure we maintain supply while giving renters more protections.’

Factors such as the pace and scale of interest rate cuts from the Bank of England are likely to have a bigger impact on the housing market

Meanwhile, Kate Eales, of estate agents Strutt & Parker, suggested that the calling of the election can be met with a sigh of relief.

She said: ‘The news of the general election being just six weeks away should be met by the market with a sigh of relief rather than a gasp of panic.