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Global Election Will Your Vote Affect Your Home's Value Abode2 Property Magazine

Global Election Frenzy: Will Your Vote Affect Your Home’s Value?

28.03.24

Swedish rock band Europe’s kick and snare anthem ‘The Final Countdown’, couldn’t be a more apt rally cry at present. Global election fever is gathering pace, with 65 countries including the US, the UK, Egypt, India, Mexico and South Africa heading to the ballot box in the coming months, giving 40% of the global population (some 4.2 billion people) a chance to vote. If this sounds exceptional, it’s because it is: we will have to wait until 2048, for the world to witness the same gaggle of governments trying to win over voters with visions of economic recovery. 

Real estate markets noticeably soften in election years. Policies of the vying parties create uncertainty, opportunity, expediency, indecision and much, much more in the property arena. This impacts tenants, owner occupiers, landlords and investors in a myriad of ways. 

The fun begins when voters start to believe the political hype. Back the opposition and the nation will be on a FedEx fast-track to Hades. Paralysis ensues and folk opt to stay put rather than sell up, downshift or invest, because they don’t want their bricks and mortar savings charred in the fiery pit of a new political hell. 

Post-election brings about a counterculture. Voters whose party wins the day, start to spend freely, because they believe the future is going to be sunshine, unicorns, chocolate fountains and roses. The opposition spend too because they can’t do a thing about it until the next election. 

Why? We argue that house prices have both a direct effect on people’s satisfaction with the economic and political status quo – after all, higher house prices do literally make people richer – and an indirect effect, in as much as they represent how much society values the place where we live. What’s a better ‘geographic pattern’ reflection of how individuals appraise their hometown or city than how much they would pay to live there?  

All this ‘wait and see’ psychology is playing out now before our very eyes, both here and abroad. Take the conceivable return of Trump to the White House which is understandably making investors in US prime residential property nervous. Interest rates are finally falling, home prices continue to rise, there’s trillions in cash on the sidelines, and pent-up demand for property purchases is explosive. True to pre-election high noon however, would-be buyers are biding their time. 

Similarly, in the UK, demand for property is repressed, although lower interest rates are on course to boost recovery in the mainstream. As buyers return to the market, however, so will bidding wars, and we are likely to see prices climb.  

So, what’s essential for a general election to have a lasting impact on the housing market? The outcome needs to raise the possibility of a material change in the macroeconomic backdrop, along with property taxation and grass-roots housing policy. Both Sunak and Starmer seem keen to turbocharge new homes development along with promises to ease planning regulations and increase land supply. The winning manifesto will also have to dangle a carrot incentive before private renters who are key to securing potential swing seats. 

Housing is unquestionably one of the biggest issues of the upcoming general election, with recent polling showing that it was the fourth most important to Britons, behind only Health, the Economy, and Immigration. Who will you trust to watch the biggest investment you’ll ever make?

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