Resilient Housing Market Thrives Amid Election Uncertainty

Despite the upcoming General Election, the housing market is showing remarkable resilience, with buyers and sellers determined to proceed with their home moves, according to recent research.

Since the election was announced on May 22, the property market’s activity has not only remained steady but has also surpassed last year’s levels in both demand and supply.

Research from TwentyEA, part of the TwentyCi group, covering the 14 days following May 22 (from May 23 to June 5), indicates a notable increase in the number of sales subject to contract (SSTC). The total reached 51,025, a 9% rise from the 46,802 recorded during the same period in 2023. Simultaneously, the supply of new property listings saw a 3.4% increase, climbing to 70,049 from 67,753 the previous year. These figures are more consistent with the same 14 days in 2019, the last normal market before the pandemic.

This trend continues the strong market performance observed since the start of the year, with activity closely resembling that of 2019. Over the first five months of 2024, the supply of new instructions hit a six-year high of 763,651, marking a 13% increase from the same period last year and a 5% rise compared to 2019. Demand, measured by SSTCs, surged by 17% from 2023 to 529,172, and by 5.5% from 2019.

The supply-demand ratio stood at 69.3% from January to May 2024, slightly higher than last year’s 67.1% and aligning with the 2019 figure of 69%.

Across the UK, every region experienced an uptick in supply compared to last year. The South West saw the most significant increase with new instructions rising by 16.5%, followed by the South East at 15.3%, Scotland at 14.8%, Inner London at 14.6%, and the East of England at 14%. Notably, since 2019, Inner London has seen the highest growth in new instructions, up by 26.6%.

Regarding demand, the Outer London region led with a 19.2% increase in SSTCs from January to May 2024 compared to the same period in 2023. The East of England followed closely at 19.1%, Inner London at 18.4%, West Midlands at 18.3%, and East Midlands at 18.2%. Since 2019, Inner London has recorded the highest increase in demand at 21%.

Katy Billany, Executive Director of TwentyEA, commented, “With activity remaining steady despite the upcoming election, the market is looking pretty upbeat and is comparable with 2019, the period prior to the pandemic. There’s a healthy balance in the number of deals being struck compared with the volume of new instructions coming to market.”

Billany also noted a 17.2% rise in price changes since the beginning of the year compared to last year, attributing this to sellers becoming more realistic as the frenzied markets of 2021 and 2022 fade. However, fall-throughs have increased by 11.5% since 2023, likely due to affordability issues such as rising mortgage rates, which have caused some buyers to reconsider their plans. “As rates come down, stability will gather pace,” Billany added.

Market Data Overview

Supply Increases by Region (Jan-May 2024 vs. 2023)

Demand Increases by Region (Jan-May 2024 vs. 2023)

Analysis

While the market’s steadiness amid political uncertainty is encouraging, the increase in price changes and fall-throughs highlights underlying challenges, particularly affordability. As mortgage rates stabilize, further market stabilization is anticipated.