By Michiel Willems
The housing market could benefit to the tune of 11.3 per cent where house prices are concerned, as a result of the greater stability brought on by the appointment of Rishi Sunak as prime minister, a City firm told this paper today.
Property lending agency Octane Capital analysed property market performance across the UK market going back as far as 1970 and how house prices changed under both a Labour and Conservative government.
The results show that nominally, Labour PMs have presided over the higher rate of house price growth, with the market enjoying a 36.2 per cent annual average rate of increase versus just 26.6 per cent whilst a Conservative MP has held the position.
However, the firm then adjusted these historic rates of house price growth to take inflation into account, with the results revealing a very different story altogether.
Labour vs Tory prime ministers
In fact, after adjusting for inflation, house prices have actually declined at a rate of -0.7 per cent a year on average under a Labour prime minister.
In contrast, they’ve enjoyed an average yearly increase of 11.3 per cent under a Conservative prime minister.
With Rishi now at the helm, a similar rate of annual house price growth would boost the current average UK house price of £295,903 to £329,462 over the coming year.
“There’s certainly no fixed formula or crystal ball when it comes to future house price growth and with the market having recently endured a high level of turbulence under the brief tenure of Liz Truss as prime minister, the outlook over the next 12 months remains uncertain to say the least,” stressed the CEO of Octane Capital, Jonathan Samuels.
“That said, we have seen a certain degree of stability return to the market in recent weeks and the appointment of Rishi Sunak as the latest prime minister has helped to steady the ship somewhat,” Samuels told City A.M.
“When analysing historic market trends, it’s also clear that the Conservatives have been the best party where property market buoyancy is concerned, with house prices climbing by an average of 11.3 per cent a year under a Conservative prime minister,” he concluded.
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