how will the general election impact the property market?

As we approach the upcoming general election, landlords and investors like yourself may be concerned with its impact on the property market. After all, any major political event has the potential to influence the economy and housing market. Other worries that may be on your mind include the possibility of even stricter lending criteria from high-street lenders, as well processing delays due to increased demand as borrowers try to complete their transactions before 4th July.

Understandably, many borrowers may feel overwhelmed. However, it’s essential to remember that with every problem comes an opportunity for a solution and, as a specialist finance lender, it’s our job to remain informed and equipped to guide you through any obstacles you may face during this time. So, let us explore the main concerns and how we have positioned ourselves to offer the necessary support should you need it.


pre-election jitters

Rishi Sunak’s decision to call a general election in early July with only six weeks’ notice blindsided many, from seasoned political commentators to his MPs. Since then, one of the main concerns that homeowners and property investors may have is how the general election results will affect the housing market.

While there is always a level of uncertainty surrounding any election, it’s essential to remember that the UK housing market is resilient. Historic data shows that despite political changes, the housing market has remained stable over time. Moreover, it has stayed relatively steady in the wake of Sunak’s announcement, with some minor fluctuations. These included Swap rates initially rising from 4.5% to 4.7%, but eventually settling at 4.6%. Similarly, mortgage rates from major lenders also saw a slight increase, going up from 5% to 5.1%. Although any rate rise may be undesirable, these changes are not as significant as the 90-basis point increase observed in September 2022, followed by a drop to around 60 points.


what the experts are saying

The impact of an election on the property market is a hot topic of discussion yet what we have seen so far suggests that as with previous election cycles, any significant upheaval is unlikely. Rightmove’s June House Price Index showed that the election has had little effect on most of the sector with the number of sales being agreed up 6% year on year. Buyer demand also increased, rising 5% annually.   This is consistent with what Savills discovered back in March when 79% of the clients they surveyed stated that the upcoming election will not affect their plans to move in the next year.

The most significant factor in the mainstream housing market remains affordability, suggesting that the rate and magnitude of interest rate cuts will have a greater effect on the market than the timing or result of the general election. This is especially relevant considering the high probability of a change in government. If interest rates do begin to rise again, then affordability will come back into sharp focus.

Furthermore, Rightmove reported that the average time to complete a sale after an offer is accepted is 149 days, up from 119 in 2019. There are multiple reasons for these delays, including lengthy local searches, understaffed conveyancing companies, and a post-pandemic reduction in conveyancers. As a result, there has been a flurry of newer and sometimes less experienced companies that cannot cope with more complex purchases.


short-term lending solutions

In these uncertain times, it is our priority to ensure that you are supported and have access to the financial resources needed for your personal or professional pursuits.

If you don’t want to wait for the election results to come in, a bridging loan could allow you to quickly secure funds for a variety of purposes, including purchasing a property, preventing a chain break, and unlocking equity. Our bridging team understand that time is of the essence in these situations and are dedicated to helping you navigate uncertain times. They ensure our indicative terms are produced within one business hour, and the close relationships we have developed with our third-party providers allows us to work together collaboratively to achieve the best possible outcome for you, even in adverse situations.

For those cases that qualify, we also offer automated valuation models (AVMs) on residential regulated and unregulated bridging finance applications on properties valued under £750,000 – speeding up the process further.

get in touch

At MT Finance we’re always looking for solutions, not problems. Our dedicated bridging team is on-hand to talk through a case before submission. To chat an enquiry through with us directly, please fill out this form and we will be in touch with you shortly.

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