Has the snap election being called impacted the higher end of the market?
The UK property market has had a lot to contend with over the past half a dozen years or so, from Brexit, Covid, interest rates at their highest in 16 years, and inflation reaching double digits for the first time in 43 years.
The market has been resilient throughout this time and appeared to be moving in the right direction in 2024 following a difficult 2023.
However, a snap election being called by Rishi Sunak on 22nd May and a few months earlier than expected, struck fear into many estate agents with them thinking not another factor to contend with that could impact seller supply and buyer demand.
I’m going to use this article to explain how the higher end of the market has reacted in the two weeks post election announcement in the hope that it can help give agents the confidence that there is definitely business out there to be done and help educate the public when it comes to making informed moving plans.
David Lindley and I have both shared previously some great insight from Savills highlighting that 79% of people looking to move in the next 12 months said the general election did not impact their commitment in moving with a further 13% actually more committed to moving.
What’s even more interesting is that the net balance for movers at £1m-£2m was +3% and £2m+ was +1.3%.
Simon Leadbetter also shared some fantastic insight on LinkedIn recently stating the overall number of people who intend to buy or sell a property in the next 12 months has increased slightly, from 1.524 million in the 12 months up to the 19th May to 1,531 million in the 12 months up to the 2nd of June and this is 7,000 more.
There is also further research from Nationwide, Hamptons, Knight Frank, and Dataloft showing that previous general elections have not had the impact on prices or activity levels that people would perhaps expect them to.
If you would like access to this research, please do feel free to contact me and I will happily share my findings with you on this.
The other interesting point to consider is the below from Rightmove where 95% of home-movers say the general election will not affect their moving plans and that demand was stable in the lead up to both the 2015 and 2019 elections, with demand boosted following the result of both elections as well.
My own research has also found that whilst the supply of new listings and sales agreed above £1 Million in the two weeks following the election announcement are down slightly compared to the two weeks prior to the announcement, they are still up on the same period across the previous five years.
The data also revealed that the number of properties withdrawing from the market was significantly down and this suggests to me that sellers are very committed to moving even with the perceived uncertainty ahead of them.
This is further backed up by the fact these sellers also continue to adjust their asking prices to appeal to buyers rather than just deciding to exit the market and wait to see what happens following the results of the election.
Buyer confidence also does not appear to be dented as much as you would think with the number of sales falling through only 7.7% higher than the two weeks leading up to the general election announcement.
In conclusion, data from previous elections and the reaction from the recent announcement of the upcoming election is showing that there is definitely business out there to be done if you know how to find it.
There have also been a lot of positive things happening around the market recently that have boosted confidence and the commitment for people to move home following several years of uncertainty.
Inflation is at the lowest point since the summer of 2021 and GDP grew by 0.6% in Q1 following two successive drops in the previous two quarters.
The base rate has paused 6 times in a row with the last two meetings having no members voting to increase the base rate and 2 members voting to reduce in the last meeting.
Mortgage approvals have continued to rise for 6 months, transactions are up 4 months in a row and are up year on year for the first time since November 2022.
Transactions in April 2024 were up 5% from March and 10% higher than April 2023.
How do agents use this data to their advantage at the higher end of the market?
In my experience, a lot of estate agents will use the election as an excuse to downplay the market rather than proactively marketing a property to find a buyer.
On top of using the election as an excuse it will also be Euro 2024 and then the summer holidays as the next reasons as to why a property is not selling.
Only yesterday, a property down the road from me was listed at £2,300,000 with no floorplan, video, drone footage, or twilight photography.
If the property does not find a buyer, will the agent blame the election, Euro 2024, the summer holidays or the inferior marketing?
My advice to any agents reading this right now is to contact the properties that are for sale at the higher end of the market in the local area offering a complimentary marketing review of their listing if the current agent is saying the market is quiet due to the election.
This could be done via direct mail, door-knocking, messaging on social media, and contacting your existing database.
If you would like any advice on how to approach any of these strategies, please do feel free to contact me and I will be very happy to assist you with some proven techniques.
Thanks for reading.
Simon Gates - Opening The Gates
