Homebuyers keep calm and carry on

This General Election being met with pointed apathy is no revelation. Though, perhaps more surprising is its apparently relinquishing influence on the property market. A recent piece in The Times suggested that, for the first time in a long while, international buyers were undeterred by news around our current and would-be political leaders with a strapline claiming: “Rishi who? Wealthy US buyers don’t care about UK politics” following New Yorkers’ comedy-gold responses to Simon Brodkin’s canvassing of the current Prime Minister that went viral.

 It presented a similar viewpoint on the ground from agents who were continuing to see healthy appetite and transaction rates from this international market, the general sentiment summed up neatly by Beauchamp Estate founder, Gary Hersham: “Americans don’t give a flying f***”.

New data published last week showed a similar Carry On Regardless attitude, here, among UK buyers too.

OnTheMarket’s latest Property Sentiment Index (PSI), released last Monday, shows buyer confidence at its highest in six months. The monthly poll by the leading property portal canvasses over 80,000 buyers and sellers to gauge confidence in their respective transactions, attitudes toward securing a mortgage, and the speed of property sales. 

While typically moving only marginally in either direction month on month, data from May’s research showed 85% of buyers felt confident they would buy in the next three months, compared to just 64% in April.  

Though perhaps not quite as an emphatic conclusion as Mr Hersham’s, it is the highest level of buyer confidence reported in the last six months, despite the looming General Election, suggesting Brits are indeed perfectly calm and carrying on unfazed by the pending political change.

It also showed the speed of property sales continuing to increase with 43% of listings Sold Subject To Contract (SSTC) within 30 days. This was 2% higher than the month prior and 11% compared to six months ago. A further and perhaps more robust indication as a measure of buyers’ action and not just plans. Rightmove data released the same week concurred with 95% of its 14,000 prospective buyers confirming the election will not affect their plans to move and an increase in sales, with 6% more being agreed over the last four weeks compared to the same period last year.

Historically, periods of national uncertainty, like pending political change, have slowed market activity. House prices have traditionally seen a marked increase in the year following every General Election (by an average of 5.4% according to eXp UK) as suspended plans and pent-up pre-election demand was realised (with the exception of 1992 and 2010 when markets were still recovering).

There are several schools of thought as to the change of heart. The President of OnTheMarket pointed to the potential (and increasingly likely) change being a long time coming and not only “considered by many to be a foregone conclusion but also not one of particular concern to the market”. And with so many moving decisions having been on hold already amid interest rate rises, the need to upsize/ release equity/ fly the nest etc is now greater than the risks posed by a change in government. 

 It may also be a matter of perspective. Personally speaking, the last six months have felt refreshingly stable in context of the various chapters of chaos since early 2020. By contrast, the General Election is perhaps the least uncertainty faced by the market in recent history.

One thing’s for sure, and that it’s not the good old British weather that has buoyed buyer spirits and inspired an unexpectedly sunny outlook having arrived fashionably late to the party. Though, I wouldn’t underestimate the influence of the mercury level over a party manifesto this year.