What will the General Election mean for Evesham’s 6,544 homeowners?

Of Evesham’s 10,077 households, 3,116 homes are owned without a mortgage and a further 3,428 are owned with mortgage borrowing. Many homeowners have contacted me recently, asking what the General Election will mean for the Evesham property market.

Whilst I don’t have a crystal ball, I would suggest that the best way to forecast the future is to review the past.

Having looked back at the five most recent general elections and analysed what happened to the property market on the lead up to and after each election, some interesting information has come to light.

Of the last five general elections (1997, 2001, 2005, 2010 and 2015), the two elections that were least certain were the most recent (2010 when the collation were elected and 2015 with an unexpected Tory majority). Therefore, I wanted to compare what happened in 1997, 2001 and 2005, when Tony Blair was guaranteed to be elected/re-elected versus the last knife edge uncertain votes of 2010 and 2015 … in terms of the number of houses sold and the prices achieved.

168 Graph 1

It is clear, looking at the number of monthly transactions (the blue line), there is a certain rhythm or seasonality to the housing market. That rhythm/seasonality has never changed since 1995 (seasonality meaning the periodic fluctuations that occur regularly based on a season – i.e. you can see how the number of properties sold dips around Christmas, rises in Spring and Summer and drops again at the end of the year).

To remove that seasonality, I have introduced the red line. The red line is a 12 month ‘moving average’ trend line which enables us to look at the ‘de-seasonalised’ housing transaction numbers, whilst the yellow arrows denote the times of the general elections. It is clear to see that after the 1997, 2001 and 2005 elections, there was significant uplift in number of households sold, whilst in 2010 and 2015, there was slight drop in house transactions (i.e. number of properties sold).

Next, I wanted to consider what happened to property prices. In the graph below, I have used that same 12-month average, housing transactions numbers (in red) and yellow arrows for the dates of the general elections, but this time compared that to what happened to property values (pink line).

168 Graph 2

It is quite clear that none of the general elections had any effect on the property values.  Also, the timescales between the calling of the election and the date itself means that any property buyers’ indecisiveness and indecision before the election will have less of an impact on the market.

So finally, what does this mean for the landlords of the 1,612 private rented properties in Evesham? Well, as I have discussed in previous articles (and just as relevant for homeowners as well) property value growth in Evesham will be more subdued in the coming few years for reasons other than the general election. The growth of rents in Evesham has taken a slight hit during the last few months, making it necessary for landlords to be realistic with their market rents. But, in the long term, as the younger generation still choose to rent rather than buy, the prospects, even with the changes in taxation, mean investing in buy-to-let still looks a good bet.

If you want to read more about the Evesham property market – then why not read more of the Evesham & Pershore Property Blog or give us a call on 01386 761515.

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