The looming question for many homeowners is whether to sell their property before or after the next general election. New insights from Winkworth, a leading estate agency suggest that selling before the election might be the wiser choice for those looking to maximise their property’s value.
Winkworth’s research, powered by Dataloft’s analysis of house price trends surrounding the seven most recent general elections, reveals a pattern that could influence homeowners’ selling strategies. This investigation spans various regions, including Greater London, the South East, South West, East Anglia, and Northamptonshire—areas where Winkworth operates.
The findings are telling: property price growth tends to dip in the three months following an election. This trend was particularly noticeable after the 2019 election, which did not see the anticipated ‘Boris bounce’. Instead, while prices increased by 4.2% in the lead-up to the election, they only rose by a marginal 0.7% afterward, with prime central London witnessing a significant 9.4% decrease.
The Pre-Election Distraction
Dominic Agace, Winkworth’s CEO, points out the distraction factor of elections, noting that the political noise and policy promises can detract from real estate activities, leading to a slowdown in the market. This pattern is not new; historical data shows a consistent pre-election price increase, followed by a post-election deceleration, although there were exceptions in 2005, 2010, and 2017 when prices continued to rise.
Interestingly, when examining the UK-wide data, a different picture emerges. Overall, house prices tend to fare better after an election, with a collective 53% increase compared to a 44% rise in the years leading up to elections. This suggests that while elections introduce uncertainty, they may not be the primary driver of house price trends.
Election Effects on Market Activity
Winkworth’s analysis also highlights a temporary slowdown in sales activity before an election, attributed to the uncertainty surrounding potential policy changes. This slowdown is typically reversed once the election results are in, offering more stability and predictability to the market. However, timing is crucial, as delaying a sale until after an election could mean missing out on the spring sales boom—a prime time for the property market.
Market Sentiments and Strategies
Despite the uncertainties elections bring, many in the industry, like Jeremy Leaf, a north London estate agent, and Sam Mitchell, CEO of online estate agents Strike and Purplebricks, believe that the fundamental demand and interest in the UK property market remain robust. Mitchell anticipates a positive market trend leading up to the election, supported by favorable economic conditions such as falling inflation and the potential for interest rate cuts.
The Bottom Line
While the upcoming election presents a degree of unpredictability, the consensus among experts is clear: waiting for a post-election surge may be riskier than capitalising on the current market conditions. With historical data suggesting a slowdown in price growth following elections and the spring season offering a natural boost in sales, homeowners considering selling should weigh their options carefully. Ultimately, market trends, political outcomes, and seasonal influences all play a role, but the decision to sell should align with individual circumstances and goals.