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Busy start to the week for brokers backed by Bank of England data following previous elections

ended 09. July 2024

An analysis of Bank of England data shows that mortgage approvals have risen by 4.4% on average in the three months after the previous 8 General Elections compared to the three months before (see graph below).

Newspage asked brokers if increased demand for property and mortgages is what they have experienced following previous General Elections, whether they are expecting it to be the same this time round and if they have already seen an increase in demand.

Broker Harps Garcha said: 'Already this week, mortgage enquiries are up, as the pent-up demand that forms during election campaigns feeds through."

Broker Katy Eatenton also experienced a busy start to the week: “It's still early days but this Monday was definitely a lot busier than last Monday. Whether it's a result of rates being cut across the board, the General Election being behind us or expectations of a base rate cut, the phone has started ringing again and there are lots of home mover enquiries coming in.”

Another broker, Bob Singh, added: “Post-election house price rises and increased mortgage demand have been a definite pattern over the years.”

For the views of 16 brokers, see bottom.

 

16 responses from the Newspage community

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Harps Garcha
Director at Brooklyns Financial
History looks set to repeat itself this time round. Already this week, mortgage enquiries are up, as the pent-up demand that forms during election campaigns feeds through. Add to that the much-anticipated interest rate cut and the latter half of 2024 is shaping up to be a very busy time for the property market. A lot now comes down to what Labour does next, but the property market, housebuilding and planning certainly appears to be a big focus for the new government.
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Katy Eatenton
Mortgage & Protection Specialist at Eatenton Finance
It's still early days but this week was definitely a lot busier than last week. Whether it's a result of rates being cut across the board, the General Election being behind us or expectations of a base rate cut, the phone has started ringing again and there are lots of home mover enquiries coming in. If the Bank of England reduces the base rate when the Monetary Policy Committee next meets, August could be unseasonally busy.
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Andrew Montlake
Managing Director at Coreco
Though one day won't define the market over the next week or month, we did see a rise in mortgage enquiries on Monday. Having put their plans on hold, more people appear to be acting on them now. There is every likelihood that the property market will continue to improve and pick up momentum. We have the stability of a new Government with a large majority and the expectations are for a Bank of England rate cut. When that happens, the pent-up demand that will be released will turn a small snowball into an avalanche of activity. Make no mistake, though, much hangs on the shoulders of the Bank of England, with lenders waiting in the wings to charge into a competitive battle, and buyers also eager to enter the fray. A further over-cautious mis-step will leave the Governor with some serious questions to answer.
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Bob Singh
Founder at Chess Mortgages
Post-election house price rises and increased mortgage demand have been a definite pattern over the years. History does have a habit of repeating itself. Now that a new Labour Government is settling in, for many prospective buyers and homemovers it will be a signal to enter the market. Against a backdrop of lower interest rates going forward and the expectation of a cohesive housing plan, buyer confidence is likely to return. With enhanced first-time buyer products and schemes, lenders should brace for a busy second half. Let's hope the Bank of England doesn't score an own goal when its Monetary Policy Committee next meets.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
If mortgage enquiries and house prices rise in the months after elections, it's likely because there is a degree of pent-up demand built up during the weeks before an election, as attention switches from property search to political debates. Also, a new government often results in a period of stability and higher confidence in the markets, which again stokes the fires of borrower demand.
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
Following the General Election, we are expecting renewed energy in the mortgage and property market, perfectly in line with previous post-election trends. This time, the momentum seems even stronger. The Bank of England is expected to cut rates on August 1st, and with mortgage pricing already on the decline, we foresee a fresh wave of enthusiasm sweeping through the market. Interestingly, our company has not experienced the typical seasonal summer dip, indicating that confidence remains higher than anticipated. The combination of political stability and potential monetary easing paves the way for a particularly robust period for the housing market, making it an exciting time for buyers, remortgagors and lenders alike.
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Chris Barry
Director at Thomas Legal
There's usually a rise in post-election property market activity. It can be because buyers feel more confident in a new Government bringing in some medium-term stability but is likely also a result of the tumbleweed market that typically precedes an election. Saying that, this year has been very different as the election announcement in May didn't hinder demand and activity remained high. Post-election activity this term is likely to be higher than average as mortgage rates are declining and there is growing consumer confidence not just in the economy but in the base rate being cut.
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Kundan Bhaduri
Property Developer and Portfolio Landlord at The Kushman Group
Historically, a change in government has more often than not resulted in an increase in market activity and increase in house prices as well. However, Labour came to power on the back of solving the housing crisis. It remains to be seen what different policy measures the new government will bring to incentivise for-profit housebuilders to build more homes with private money. For Labour, this capitalist ropewalk will be a real predicament given its socialist roots. The rental market will also be going through a major flux over the next couple of years. With Labour firmly in the driving seat, a new avatar of the Renters Reform Bill will be introduced soon, albeit more stringent and tilted in favour of tenants. Many more landlords will consequently leave the market, causing supply to dwindle further in the face of ever-increasing housing demand, and likely driving rents up as a result.
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Hannah Bashford
Director at Model Financial Solutions
A lot of people will have been waiting for the result of the General Election before they act, so now that the new administration is in place we expect there to be more activity. While many potential buyers will feel more confident following the General Election result, that first base rate cut from the Bank of England is going to be the thing that really ignites the market and restores buyer confidence. Markets are increasingly expecting a rate cut and, if it comes in August, demand for property could soar in the second half of the year.
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Adam Stiles
Managing Director at Helix Financial Partners
We always see a lot of 'wait and see' clients holding out for seismic economic and political events and this was no exception. There's a large amount of pent up demand and adding in a potential rate cut will hugely boost the property industry - which is much needed.
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Justin Moy
Managing Director at EHF Mortgages
As long as mortgage rates continue to be relatively expensive, which they are despite recent falls, this will subdue activity within the property market. Borrowers may also remain somewhat cautious about the new government. A base rate cut will have more influence on activity, giving renewed confidence to buyers and should bring mortgage lenders out of their summer coma. The road is long, with many a winding turn.
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Rohit Kohli
Director at The Mortgage Stop
A large number of borrowers and potential buyers would have delayed their plans as soon as the General Election was announced. While I expect there to be an uplift in the second half of the year, I think much hangs on the Bank of England as expectations for a rate cut continue to grow.
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Dariusz Karpowicz
Director at Albion Financial Advice
The post-election period typically sees increased activity. Buyers who were waiting for the outcome and holding off due to uncertainty often start to get active once they know who is at the helm. Historically, mortgage approvals have risen after elections, and this time could be no different. If the Bank of England cuts rates on 1 August, it could make the post-election quarter even stronger. A significant rate cut, like 0.5%, would be welcomed by everyone and could really boost the property and mortgage markets.
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Simon Bridgland
Director at Charwin Private Clients
Mortgage approvals could fly in the quarter following this general election, all the more so given the rate cuts lenders are currently announcing. The feel-good factor can take hold of the electing public as history has shown that a general election is a popularity vote and if the people are fed up with the status quo then it's out with the old. So if it's John Major's grey demeanour, Blair's cool Britania or even Johnson's bumbling buffoonery, change will often come as the nation's mood changes. Pent-up demand could release a surge in a market crying out for a positive lead in direction on housing. Will Matthew Pennycook be any different to previous Housing Ministers? Only time will tell? Radical change requires radical announcements, but with the coffers pretty empty, how radical can the new government afford to be? Stamp duty cuts are likely to help some, but capital gains tax rises are a given so landlords will be savaged unless a lifeline of sorts is thrown their way.
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Emma Jones
Managing Director at Whenthebanksaysno.co.uk
Once the polls are closed and the results are in, attention often switches back to property from politics. The next few months have the potential to be very busy, especially if the Bank of England cuts rates. The fact that lenders are cutting rates on an almost daily basis now is also boosting sentiment.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
No one wants to be completing on their mortgage the day before a stamp duty holiday is announced; which is why it makes total sense that mortgage approvals take a dip before and then rise again after a general election. With a new government comes, potentially, new thinking and new rules, some of which may benefit a new homeowner, so people take a "sit and wait" approach beforehand, which in turn creates a pent-up demand which is then released post-election, when people feel more confident they aren't going to be missing out on anything.