How will the UK general election impact house prices?

First, let’s take a look at what’s been happening with house prices so far this year. 

2024 has been a difficult year for the property market to date. Earlier this year, it was predicted that house prices could fall by as much as 10% by 2025 due to demand being impacted by higher mortgage rates and stretched affordability. 

The most recent figures in May show that annual house price growth is running at -0.1%. As well as higher mortgage rates continuing to discourage buyers, there are also more homes for sale than there have been at any point in the last 8 years, which has boosted supply. 

Part of this is caused by home sellers returning to market. Almost a third of homes currently available for sale were also listed in 2023 but failed to find a buyer, with 43% of these homes cutting their asking price by more than 5% to attract interest. 

While this might not be welcomed news for home sellers, after several years of low supply and elevated prices the current conditions could bring house prices to more affordable levels, or keep house price inflation stable for the rest of 2024.

Learn more: Are house prices still rising?

Do house prices drop during an election year?

When you look at previous years, there hasn’t been any volatility in house prices or drastic changes around general elections. This is because house prices are more influenced by market changes and economic conditions, as opposed to election-related news or announcements. This isn’t unsurprising - for those wanting to get on the ladder or move house the election probably doesn’t have a huge impact on when they decide to make the move. 

The only exceptions to this are when there’s a hung parliament, or if one party has a winning majority. Stability is crucial to house prices rising - so when a party wins by a clear mile house prices rise 6.9% more than if the election results in a hung parliament. 

How will the general election affect house prices?

We could see a post-election boost to the property market, as the new political certainty should boost confidence. But we are unlikely to see a significant surge in property prices. House prices are expected to stay flat for the rest of 2024. Whether prices do increase will be influenced more by mortgage rates (hopefully) falling, as this will make getting onto the ladder or moving house more affordable than it has been in recent months. 

The election could also mean a new wave of house-building. At the moment, it’s likely boosting housing supply will be a key element of each party’s housing policies. Building more homes could increase the number of affordable housing available to first-time buyers. If supply continues to outpace demand, this could keep house price growth low over the next couple of years, which will help aspiring buyers get onto the ladder.