Next year’s general election may have little impact on house prices – but will hit transactions, an analyst has said.
Investment bankers Jefferies said that general elections generally do not stall house prices.
Looking at the last seven elections, going back to 1979, it says that on average, house prices 12 months before an election are 4.9% lower than on polling day, and 12 months later are 8.6% higher.
Transactions do slip before an election, historically by 3% to 8% in the four-month lead-up.
However, the last three elections have shown a much bigger trend. In the 2001 election, transactions slid 14%, and in the 2005 election by over 50%. At the last election, transactions in December 2009 were 48% higher than on polling day in May 2010.
Jefferies said: “In our view, this confirms what many intuitively believe – that the uncertainty regarding elections will delay a prospective home owner’s decision to purchase.”
Jefferies also commissioned an independent survey on UK home owner attitudes to the housing market.
Just over 1,000 people were surveyed, of whom a slight majority (54%) no longer had a mortgage.
An overwhelming majority (83%) thought house prices would rise over the next 12 months.
Comments (1)
Does Jefferies have any sagely advice on sucking eggs they can share? My old Nan has won both regional and national rosettes over the years but now fears she has been doing it all wrong.
Anyone who has been in the industry for a single election cycle and had their wage packet determined by transaction levels could have written this bit of publicity. If the promised PIE Christmas soiree includes an awards section please can I nominate Jefferies for the 'N' S' Sherlock' award for stating the blessed obvious?