Sir Keir Starmer is now set to move into No.10 Downing Street after his Labour party won a huge majority of votes in the general election. Following a landslide victory, Keir is now Labour’s first prime minister since Gordon Brown in 2010, ending the Conservative Party‘s 14 year streak.
Rishi Sunak has now stepped down after conceding defeat with a historically low number of votes and several senior party figures including Liz Truss, Jacob Rees Mogg and Penny Mourdaunt losing their seats.
Following the election result, property experts have now weighed in on what the housing market will look like going forward under the Labour party, with some experts suggesting their win could deliver a confidence boost to homeowners.
READ MORE: Every promise Labour has made to homeowners and renters in the general election
According to Halifax’s latest index, the average UK house price remained relatively stable in June, but property prices are now expected to see a modest increase throughout this year and into 2025.
The annual rate of house price growth was at 1.6 percent, and on an annual basis, house prices have seen an increase for seven consecutive months. Halifax says that the UK house price in June was £288,455, slightly down from £288,931 in May.
Amanda Bryden, head of mortgages, Halifax, said: “UK house prices stayed relatively flat for the third successive month in June, with the slight fall equivalent to less than £500 in cash terms.
“This continued stability in house prices – rising by just 0.4% so far this year – reflects a market that remains subdued, though overall activity has been recovering. For now it’s the shortage of available properties, rather than demand from buyers, that continues to underpin higher prices.”
She continued: “Mortgage affordability is still the biggest challenge facing both home buyers and those coming to the end of fixed-term deals. This issue is likely to be eased gradually, through a combination of lower interest rates, rising incomes, and more restrained growth in house prices.
“While in the short-term the housing market is delicately balanced and sensitive to the pace of change to base rate, based on our current expectations property prices are likely to rise modestly through the rest of this year and into 2025.”
In some signs of relief for borrowers, lenders including Halifax, HSBC UK, Barclays, Santander, NatWest and Yorkshire Building Society have been chopping their mortgage rates this week. Some 1.6 million mortgages are coming off fixed rates this year, according to UK Finance.
Labour will be keen to encourage more first-time buyers to get a foot on the UK’s housing ladder, something that has become a major challenge for many young, and not so young, buyers.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the wealth manager, said: “A stable political environment can potentially deliver a confidence boost to the housing market, particularly one that has struggled over the past year with high borrowing costs and a dearth of available and affordable stock.
“Buying a first home, upsizing and even downsizing are all major personal finance decisions, which is why confidence in how your country is run is vitally important. Interest rates have remained at a 16-year high of 5.25% for almost a year causing major affordability challenges for first-time buyers and those looking to move to larger homes.
“While the combination of lower inflation and strong wage growth has offered a slight boost to housing affordability, for many the dream of home ownership is still out of reach. Throw in interest rate cuts, however, with the first reduction expected as early as next month on August 1, and, in turn, more competitive mortgage rates, and the market could experience a surge in demand.”
Ms Haine added: “Labour will be keen to encourage more first-time buyers to get a foot on the UK’s housing ladder, something that has become a major challenge for many young, and not so young, buyers in recent years who have struggled to find affordable homes in many parts of the country.”
Iain McKenzie, CEO of the Guild of Property Professionals, said: “Despite high interest rates and the run-up to the general election, the property market has remained resilient, which is reflected in the more optimistic house price forecasts for the remainder year. We are seeing confidence return to the market and expect it will continue to build momentum once the dust settles post election.”
Nicky Stevenson, managing director at estate agent group Fine & Country said: “While the property market has had to contend with elevated interest rates and political uncertainty, it has held firm and is expected to see further buoyancy following the General Election.
“Annual house price forecasts reflect a more positive outlook than they did in the beginning of the year, helped by headline inflation reaching its target 2%.
“Inflationary pressure easing and a bank rate cut imminently expected has also positively spurred market sentiment. While the reduction in mortgage debt costs has been modest so far, the combination of better interest rate forecasts and a brighter economic outlook has provided more room for house price growth in the second half of the year.”
Tom Bill, head of UK residential research at estate agent Knight Frank, said: “Stubbornly high mortgage rates and the uncertainty of a General Election means the UK housing market has not experienced a particularly strong seasonal bounce this spring.
“We expect trading volumes to increase from the autumn as a rate cut becomes imminent and relative calm returns to Westminster. A Labour victory will have little bearing on what happens in the property market in 2024 and our forecast of an average 3% UK rise is unchanged.”
Myles Moloney, area sales manager at estate agent Chase Buchanan, said: “June’s property market remained positive and house hunters with larger equity and buying power pushed on to agree a sale as they felt the result of the election was forgone.”
Nathan Emerson, CEO of property professionals’ body Propertymark, said: “The announcement of a General Election last month may have caused movement in the housing market to slow down, but now that we know we have a new government with an overall working majority, Propertymark remains optimistic that house prices will start to rise during the summer months, a busy time for the housing market.”
Here are latest average house prices across the UK and the annual rate of growth, according to Halifax:
– East Midlands, £238,311, 0.3%
– Eastern England, £328,747, minus 0.9%
– London, £536,306, 0.9%
– North East, £172,308, 3.0%
– North West, £231,351, 3.8%
– Northern Ireland, £192,457, 4.0%
– Scotland, £204,663, 1.6%
– South East, £385,056, 0.5%
– South West, £301,973, 0.7%
– Wales, £220,197, 2.7%
– West Midlands, £253,049, 1.3%
– Yorkshire and the Humber, £206,370, 1.9%
