History “looks set to repeat itself” as mortgage approvals appear to be rising following the general election in line with historic trends, Brooklyns Financial director, Harps Garcha, has said.
Garcha said, even though it is still early in the week, she noticed that mortgage enquiries are rising, something which she attributed to the “pent-up demand that forms during election campaigns feeds through”.
This would be in line with previous historical trends discovered by the Bank of England, data from which reported that mortgage approvals have risen by 4.4 per cent on average in the three months after the previous General Elections compared to the three months before.
It detailed that, in 2019, mortgage approvals increased by 4.5 per cent in the three months following the election, a trend that was present in many other election years.
All General Elections saw an increase in housing market activity in the subsequent three months apart from the 1992 election which saw a 4.1 per cent decrease in mortgage approvals.
The theory was backed by Lifetime Wealth Management mortgage and protection specialist, Katy Eatenton, who said: “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.”
Model Financial Solutions director, Hannah Bashford, said some people were waiting for the election result before acting.
However, she cautioned, while potential buyers may feel more confident following the General Election result, the 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,” Bashford added.
Garcha echoed this, and anticipated the last half of 2024 being a busy time for the property market.
“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.
Meanwhile, Whenthebanksaysno.co.uk managing director, Emma Jones, said: “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 is now also boosting sentiment.”
Thanks to the Newspage community for sharing their thoughts with FTAdviser.
tom.dunstan@ft.com
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