What could the general election result mean for how much your home is worth?

According to Penwortham estate agent, Michael Bailey, house prices rose faster under Labour, but growth has been more stable under the Tories, with publicly available records showing that, from Labour’s landslide 1997 victory to the start of the coalition government in 2010, house prices in Preston increased by 173% and by 159% in South Ribble.

Values across Lancashire rose particularly steeply between 2002 and 2007, but then dropped after the financial crash.

Under the Conservatives, local house prices recovered after the banking crisis, and have continued to rise ever since but at a slower pace than under Labour. Preston properties gained 30% in value between 2010 and 2023, whilst South Ribble property prices rose by 38%.

Strikingly, neither Brexit, Covid, or the mini-budget put forward when Liz Truss was Prime Minister, all of which occurred on the Tory watch, appear to have had any significant impact on house prices despite their most lasting impact on the economy in general.

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“It’s actually quite fascinating,” said Michael. “I think property price rises are something most people would probably associate with a period of Conservative rule, when, in fact, Land Registry records clearly show that nationally and locally, they went up much more, and faster, in the New Labour era under Tony Blair and Gordon Brown than at any point in the period since the Conservatives got the keys to No10 in 2010.

“Some of that is probably thanks to the loosening of lending rules overseen by Labour that fuelled the market by making it easier for people to get mortgages. When you have a situation in which lots more people are suddenly able to buy, and demand goes up while the actual supply of properties is pretty static, simple supply-and-demand principles tell us we can usually expect prices to rise.

“However, that was also one of the reasons for the banking crash which then reversed some of the gains and saw property prices drop, leaving many of those with high loan-to-valuation ratios in negative equity territory. House prices have continued to go up under the Conservatives but it’s not been as exaggerated, and seems to have been more stable. It’s hard to pinpoint any particular reason for this though, whether that’s good policy and effective banking legislation or just sheer good luck.” 

Michael says that although the impact will probably be small and short-lived, the political uncertainty around the election is likely to feed through to the housing market for a while.

“We just don’t know what the main parties are planning, and so it’s hard for people to judge what to do for the best. For instance, a couple earning the average wage and thinking about upsizing might be worried that an incoming Labour government could put up Stamp Duty and make a house purchase more unaffordable, or that the Conservatives could hike VAT, and so might be put off moving for now, just until the dust has settled. 

“As a result of fears like this, we might see the market cool slightly over the summer, which would normally be one of the busiest times of year for property sales, but if it does, I don’t imagine that lasting too long,” added Michael.