Experts reveal if you can purchase or promote a home earlier than the election

Typically in the run-up to a general election property buyers and sellers sit on their hands. The market gets stunned into stagnation and estate agents might as well take a month or two off. But with just over five weeks to go, this snap election has caught everyone by surprise.

There are short odds on a change of government so a far bigger question hovers over anyone ready to make a move: should they hold fire now until September – or push ahead?

One reason to strike while the iron is hot – or rather the garden is looking its loveliest – is that the spring market has sprung into action late this year and there’s only half a school term left before everyone jets off on their holidays, when they won’t be scouring for a new home.

A cottage in Latimer, Buckinghamshire, with a lush spring garden that could make it more attractive to sell

If your property is already for sale there is little reason to take it off the market, says Edward Church of agent Strutt & Parker. ‘It’s easy to get caught up in the theatricality of politics but the election will be over in the blink of an eye, and you’ll be well-placed to catch any upturn in activity that follows the election.’

Dominic Agace, chief executive of Winkworth, also counsels homeowners to seize the day. ‘Grab the current momentum before the August holidays.’ he says, citing Winkworth’s Highcliffe office in Dorset which has just sold a £1.675m house to the first viewers on the first day it was put up for sale.

The snap election will not produce the two-month hiatus, as in 2017 or 2019, says Roarie Scarisbrick of buying agent Property Vision. ‘The pre-election housing market feels different this time because the outcome appears to be more predictable, and the consequences of tax threats baked into the market.’

The pace and scale of interest-rate cuts will have a more significant impact on the market than the timing or outcome of the general election, says Lucian Cook, head of residential research at Savills. ‘With the prospect of lower borrowing costs as the year progresses there is more opportunity for buyer demand to gain traction over the autumn, with most of the uncertainty behind us.’

Markets do tend to ignite after elections, so should you try to beat the rebound?

If the right property presents itself, buy now, suggests Jamie Freeman of Haringtons UK, a buying advisor. ‘Inevitably the sheep in all of us will mean the number of buyers will only increase when more clarity is available from a new government in the autumn.’

Yet there’s already been an increase in the number of properties up for sale, according to Matt Thompson, head of sales at Chestertons. ‘Don’t miss out by waiting. There’s been an increase in house hunters eager to take advantage of the larger pool of properties.’

To add to these there may be a flurry of private-school parents who need to move near a state school. A report by wealth manager Saltus last week found more than a quarter of parents will remove their children from private school and move them to a local state school if the VAT levy is imposed by Labour.

According to Zoopla the housing sales pipeline is ‘now rebuilding after a period of lower sales’. Sales agreed are 12 pc higher year-on-year and mortgages in February were 32 pc higher than a year ago.

Yet in London demand continues to outstrip supply. The election won’t alter the lack of supply says buying agent Henry Pryor, who is advising buying clients to ‘crack on’.

‘This summer we won’t have built significantly more homes. We’ll still have the cladding crisis, the leasehold crisis and be waiting for a Renters Reform Bill, and whoever wins, house prices and rents will be slightly higher come Christmas and just as unaffordable for most.’

In prime London, international buyers are pressing on before any further uncertainties, says Shaun Drummond of Harrods Estates. ‘These include Labour’s everchanging property market policies and the stance on stamp duty for overseas purchasers.’

Encouraging inflation figures are now a driver for these, says Liam Monaghan, MD at LCP/PrivateOffice, a buying agent. ‘Some are turning from an overinflated rental market or want to take advantage of favourable exchange rates.’

Even the US election is a reason to press ahead, says Jimmy Waight, head of sales at John D Wood & Co: ‘Waiting until September introduces other uncertainties, including the US election. The stark contrast between Donald Trump and Joe Biden could have ramifications for the global economy – a key consideration for buyers in prime London.’

For those who are considering either buying or selling their holiday let, the key issue is tax.

‘Motivated sellers want to get out while the higher rate of Capital Gains Tax (CGT) is lower [since the recent Budget],’ says Katie Warren of Fixer Management Services, which acquires holiday lets for clients. Capital Gains Tax is a tax on the profit when you sell an asset that has increased in value. You are taxed on the amount you have gained – so if property was bought for £250,000 and you sold it later for £300,000 you have made a gain of £50,000. 

‘If a new government proceeds with the abolishment of Furnished Holiday Lets (FHL) tax allowance, this would also be the last year of gaining those benefits,’ she adds.

Government plans involve abolishing the beneficial tax treatment for Furnished Holiday lettings (FHLs) from 6 April 2025.

Owners will lose tax benefits on mortgage interest, capital gains tax, allowable expenses and pension contributions.

Mortgage interest on FHLs is currently a deduction from rental income. From April 2025, relief will instead be given as a 20pc tax credit so for higher and additional rate taxpayers it will mean a reduction in tax relief from 40pc and 45pc respectively. From April 2025, residential property CGT tax rate of 24pc will apply to FHLs. From April 2025, you will only be able to claim a deduction for the cost of replacing domestic items against your rents and FHL profits will no longer be treated as relevant earnings.

Adds Josephine Ashby of John Bray Estates in Cornwall: ‘Buyers may use this period to negotiate hard. There are some once-in-a-generation properties on the market.’

Polperro in south Cornwall, which is a popular place for holiday lets

Then there’s the council tax on second homes that will double next year, adds Clare Coode of Stacks Property Search. ‘There aren’t as many buyers as usual, and it is very much a buyers’ market down here in Cornwall.’

Yet Joanna Cocking, Head of Private Office (Country) at Hamptons urges caution to country house sellers whose homes are in need of TLC. ‘Properties that are ‘turnkey’ or ‘move-in ready’ are getting the most interest and the best prices. Sellers whose properties could benefit from enhancements should take the time to improve their home’s appeal.’

For first time buyers, it might not pay to press pause, either, says Ben Thompson, deputy CEO at Mortgage Advice Bureau. ‘They need to make their first purchase as soon as possible so they can stop paying their landlord’s mortgage and beat rent increases of close to 10 pc [like last year]. Buyers delaying can also be caught out if house prices start to rise again whilst they are renting.’

Any future cut in the bank base rate is already largely priced into current mortgage rates, he says. ‘Even if this drops a little in the months ahead, in today’s volatile world, there are no guarantees – inflation could remain stubborn, mortgage rates may not fall by much.’

Those that adopt a wait-and-see approach could end up paying more in stamp duty, or if stamp duty is cut and there is a release of years of pent-up demand, end up paying higher property prices, says Andrew Montlake, MD of Coreco mortgage brokers. ‘Buy when it is right for you. Waiting for a new government could cost you just as much as it could save.’