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General elections barely impact housing markets – Nationwide

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  • 01/06/2017
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General elections barely impact housing markets – Nationwide
Analysis conducted by Nationwide suggests it is unlikely that general elections have any major impact on the UK housing market.

Instead, the building society data suggested it was prevailing economic conditions which dominated in the six-months before and after an election.

Next week’s general election has been suggested by many market commentators as being a key driver behind the present UK housing market slowdown.

However, this was rejected by Nationwide chief economist Robert Gardner.

“If history is any guide, the slowdown is unlikely to be linked to election-related uncertainty,” he said.

“Housing market trends have not traditionally been impacted around the time of general elections. Rightly or wrongly, for most home buyers, elections are not foremost in their minds while buying or selling their home.”

He added: “On the whole, prevailing trends have been maintained just before, during and after UK general elections. Broader economic trends appear to dominate any immediate election-related impacts.”

 

Markets dominate

The lender noted the UK was going through a particularly uncertain economic time at present and this was most likely the reason for the current situation of low house prices rises and falling mortgage approvals.

Analysis conducted by Nationwide of elections since 1997 showed that in the six-months before and after a vote, the prevailing market conditions dominated.

It conducted this analysis for house prices and mortgage approvals.

 

Graph of house prices after general elections

“As the chart illustrates, past general elections do not appear to have generated volatility in house prices or resulted in a significant change in house price trends,” Gardner continued.

“We also examined how activity, in particular house purchase mortgage approvals, responded to past UK general elections. Here the picture is less clear, but again there does not seem to be any clear impact in the three months either side of a general election.

 

Nationwide-Approvals_elections

“While activity slowed in the period immediately following the EU referendum, this was a continuation of a trend that was driven by the introduction of additional stamp duty on second homes earlier in the year,” he added.

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