What will the General Election mean for the property market?

Theresa May has spoken, calling a General Election for June 2017, effectively three years earlier than many anticipated.

The Prime Minister sees it a mandate for Brexit, though others may claim her statement on 18th April was more to do with political expediency with the government being 20 points ahead of the opposition in recent opinion polls.

What we don’t know with any certainty is the outcome of either the election or the triggering of Article 50 or their likely impact on property prices across the country, and particularly in Lincoln and Scunthorpe.

There is an old saying though that to predict the future, you need to look at the past so let’s reflect on recent general elections and what happened to property prices when a government was elected.

The last general election in May 2015 led to David Cameron securing a slim majority after the hung parliament of 2010.

According to the Land Registry in a statement from 2015: “In the weeks before the General Election, the average price of a home hit £179,817: almost £9,000 higher than a year earlier and approaching the pre-crisis high of £181,014 reached in November 2007.

“In London, the average price was up £47,000 in 12 months, and prices grew by more than 10% in 28 of the capital’s 33 boroughs.”

Lincoln’s 2015 average figures sat just below national statistics at just under £170,000 whilst Scunthorpe, always historically lower, stood at £132,000, again from the Land Registry.

What is arguably more interesting though is that in 2016 – the year following the last General Election – when the Conservative government was operating with that majority, is that interest rates remained at record lows and house price growth (according to the Office of National Statistics) saw increases from 6.7% from 2014 to 2015 to 7.9% from 2015 to 2016.

It’s fair to assume then that June 2017, the date of the next election, will see a property price blip.

Lincoln, as a city, has seen 5.8% annual property price growth in the past 12 months and Scunthorpe, 5.6% over the same period according to Land Registry data.

Starkey&Brown reckon that, with the evidence from 2010 and 2015, we may well see property price growth accelerating before and after Mrs May’s June election.

Interest rates are unlikely to increase either – whoever is elected in June 2017.

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