In this July Insights blog post, we delve into the below topics, offering our insight into the current state of the housing market and the growing pressures on families today.
In this July Insights blog post, we delve into the below topics, offering our insight into the current state of the housing market and the growing pressures on families today.
Home movers undeterred by the election
As the UK adjusts to the aftermath of the General Election, many will be wondering what this means for the housing market. However, analysis of previous election periods suggests that home movers are largely unfazed by changes in Parliament1.
Undeterred buyers
In a survey carried out before 4 July, 95% of prospective buyers said that their moving plans were unaffected by the election. This is reflective of activity seen around previous UK elections.
In the two months running up to the December 2019 vote, buyer demand was stable. Then, in January 2020 there was a 14% annual increase in demand. Similarly, demand increased by 9% year-on-year in the month of the May 2015 election. Again, the UK saw a post-election boost in the subsequent month, with demand up 18% annually that June.
What’s in store?
Rightmove’s property expert, Tim Bannister, observed, “Previous elections would indicate we may be set for a particularly strong summer once the election is over, especially if interest rates start to fall.”
Parents unprotected against child illness
Recent research has found that 52% of UK working parents do not have a financial protection policy in place which would cover them if they had to take time off work to care for an unwell child2.
Who is not insured?
Interestingly, nearly two thirds (65%) of those without protection are in part-time work, while over half (56%) are self-employed and 39% are on zero-hours employment contracts. However, these groups would potentially be in the most precarious financial position if they did have to miss work, as freelancers and zero-hours workers would not be contractually obliged to be paid during that time off.
Why aren’t they protected?
When asked why they did not have cover, most people (44%) were concerned that they could not afford it, a fifth (20%) were not aware of this kind of protection, while 9% were generally not interested in insurance policies.
It’s important to note that, nearly half (48%) of working parents do have other forms of protection, including life insurance (51%), health insurance (36%) and critical illness cover (20%).
Are you covered?
Don’t leave yourself and your family vulnerable at an already difficult time. We can help you source the appropriate cover at the right price.
UK house prices pick up
Following a slight dip in April, UK house prices showed modest growth in May.
The average house price rose monthly by 0.4% to £264,249 in May, having fallen by 0.4% the previous month. Promisingly, annual growth was also at 1.3%, up from 0.6% in April.
Expert opinion
Robert Gardner, Chief Economist at Nationwide, commented, “The market appears to be showing signs of resilience in the face of ongoing affordability pressures following the rise in longer term interest rates in recent months.”3
The UK awaits cuts to Bank Rate
It is uncertain when the cost of borrowing will improve - the earliest that base rate could come down is August, following the Bank of England’s decision to hold it at 5.25% in June. When the first cut does come, it is possible that the UK could see significant house price growth.
Signs of hope
Despite higher mortgage rates, Gardner commented that “Consumer confidence has improved noticeably over the last few months”, reflecting that this is likely due to “solid wage gains and lower inflation.”
Mortgage advice
As the UK housing market continues to fluctuate, we can help you understand what it all means for you, your mortgage and home purchase. We understand the mortgage world can often be a complicated area of finance and that’s why we are here to help.
Fewer young adults are homeowners
Over the last two decades, the number of young adults who own a home has dropped significantly4.
In 2000, 59% of 25 to 34-year-olds were homeowners, but by 2015/16, this figure had fallen to 33%. Since then, there has been some modest recovery and, in 2022/23, 39% of young adults owned a home.
Reflecting on what has driven this slow but steady recovery, Jonathan Cribb, Associate Director of Institute for Fiscal Studies (IFS), commented, ‘Income growth for younger adults has been better than for the population as a whole, with the real median disposable income for 25 to 34-year-olds rising by 9% from 2015–16 to 2022–23’.
Talk it through with us
We are here to help, whether you want to understand how your property dreams maybe affected by the election results, potential policy changes or to ensure that you have that all important safety shield in place for you and your family, Get in touch!
1 Rightmove
2 MetLife UK
3 Nationwide
4 IFS, 2024
Your home may be repossessed if you do not keep up repayments on your mortgage. As with all insurance policies, conditions and exclusions will apply.
