In Stamford, of the 8,994
households, 2,992 homes are owned without a mortgage and 2,889 homes are owned by
a mortgage. Many homeowners have asked
me what the general election will do to the Stamford property market. I have looked
over the last five general elections and analysed in detail what happened to
the property market on the lead up to and after each general election.
Of the last five general elections, the two elections that
weren’t certain were the last two (2010 with the coalition and 2015 with
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 uncertain votes of 2010 and 2015
- in terms of number of houses sold and prices achieved.
Look
at the first graph below comparing the number of properties sold and the dates
of the general elections:
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 assessed whether property prices were affected. 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).
It
is quite clear 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 also means that any property
buyer’s indecisiveness and indecision before the election will have less of an
impact on the market.
So
finally, what does this mean for Stamford’s 1,497 private landlords?
Well, as I
have discussed in previous articles (and just as relevant for homeowners as
well) property value growth in Stamford will be more subdued in the coming few
years for reasons other than the general election. The growth of rents has
taken a slight hit in the last few months as there has been a slight over
supply of rental property in Stamford, making it imperative that Stamford
landlords are 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 are interested in finding out your property's value, be that for sales or rental purposes, please get in touch with me.
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