Will the general election affect me getting a mortgage?
The Prime Minister’s recent announcement that a snap General Election will take place in June has caused uncertainty in a lot of industries. As the housing market is a major indicator of the health of the economy, experts are watching with interest to see how the upcoming election, and the uncertainty it’s caused, will affect mortgages, house sales and confidence in the market.
How general election impact house prices
In most previous election years, the housing market has been significantly affected in the run up to the vote. The Telegraph reported that, on average, the housing market is more active in the twelve to six months before the election and one to six months after the election. In the immediate four months before the vote however, transactions within the housing market are typically 3% – 8% below the level seen at the time of the election. This is often because homeowners are waiting to see what will happen, with many unwilling to make a financial commitment before they know which party will come out on top.
How could this vote differ?
This is the third year in a row that Brits have been asked to go to the polls. In 2015 we had a General Election, in 2016 we voted in the EU referendum and this year we’ll be asked to choose a prime minister once more. The result of the Brexit vote created considerable uncertainty in the UK economy, and caused the Pound to plummet. Continued confusion about EU negotiations haven’t helped to settle the nerves of big business and living costs are going up quickly for Brits across the country.
However, as the Government hopes the upcoming vote will give them a clear mandate for their negotiating position, it’s possible the election could help to reassure businesses across the country and help homeowners to feel more secure. Though it’s unlikely we’ll see a surge in the housing market before the vote, there could well be an increase in sales after June 8th as confidence returns to the market.
The general election and mortgages
Though the general election is unlikely to have a big impact on your chances of getting a mortgage, it could make banks a little more cautious about who they lend to. What’s likely to have more of an impact on your chances of getting a mortgage are the negotiations that will follow the general election. Ideally, these negotiations need to be completed efficiently and the government needs to secure a deal that’s favourable to UK lenders and the UK economy.
If you’re thinking about selling your property or buying a new home in the next few months, the general election may have a small impact on your chances of getting a mortgage. To find out more, or to talk to an expert financial advisor, contact a member of our team today.« Back to Latest Monthly News