The general election is “likely to stall the pace” of new property purchases, according to Zoopla executive director, Richard Donnell.
Donnell, who’s comments feature in research from Mojo and Zoopla looking at the general election's impact on mortgage rates and house prices, added that, as a result of this slowed sales, “completions may now fall short of the 1.1mn we expected for 2024”.
But he said overall, he didn’t expect the election to have as big an impact as in previous years, due to the fact there’s “not a huge divide in policy between the two major parties”.
He additionally provided guidance for buyers, stating: “Most buyers well into the home buying process close to agreeing a sale will ideally want to push through and agree to sales now.
“Those who are earlier in the process may look to delay decisions until the autumn after the election is over.”
The research also looked at how the announcement of the election has already affected the market, acknowledging that political events such as elections can cause economic disturbances that can, in turn, impact interest rates.
It pointed out this is usually just due to the additional uncertainty brought about by elections.
The research specified that, since the election was confirmed on May 22, the average swap rate for a two-year fixed-deal rose from 4.5 per cent to 4.7 per cent and is now down to 4.6 per cent.
Additionally, while mortgage rates have remained relatively stable, some lenders have increased rates on selected mortgage products.
The research also examined what could happen to the mortgage market after election day.
It said it was difficult to know exactly what will happen to house prices after the election if rates continue to rise, but this could affect property prices.
However, on the other hand, if rates do fall in the second half of 2024, house prices could rise as buyers gain more confidence.
Mojo Mortgages head of mortgages, John Fraser-Tucker, said: “It’s very difficult to predict exactly how mortgage rates will change after the general election given the volatility and uncertainty surrounding the election and housing market overall.
“While most mortgage borrowers might hope for falling rates post-election, numerous factors such as inflation, base rate decisions, and lender reactions make it challenging to forecast definitively.”
tom.dunstan@ft.com
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