UK general election called for 4 July
First published on KensingtonHouse.com on 1 June 2024. Figures, forecasts and quotations reflect that date and have not been updated. Read it as a record of the market at the time, not as a current view.
On 22 May, the government announced that the next general election has been set for 4 July. Industry leaders have broadly welcomed the announcement as an opportunity to provide greater certainty for UK businesses, workers and investors. The international markets also indicated their approval – the pound had already moved higher that morning (following the release of data showing that UK inflation had fallen to 2.3%, its lowest level in three years) but increased slightly further after the election announcement to sit 0.27% up against the dollar.
“Interest rate cuts and growth upgrades paint a picture of an improving property market this year”
The timing of the election announcement was generally considered an effort to take advantage of a recent slew of positive news for the UK economy. In addition to the latest inflation figures, the International Monetary Fund had upgraded the country’s growth forecast for 2024, saying the economy is “approaching a soft landing” after last year’s mild recession. The IMF report argued that the Bank of England has scope for three consecutive base rate cuts in 2024. And it is widely expected that the energy price cap will be cut by another 7% at Ofgem’s next quarterly review, further boosting household finances.
At Kensington House, we believe London property prices are likely to see a boost from the news that the date for the election has finally been set – and much earlier than many commentators were expecting. Most property experts are clear that the next few months are likely to see the growth trajectory continue. “Interest rate cuts are expected and growth upgrades for the UK paint a picture for an improving property market this year after an already positive start.” said Dominic Agace, Chief Executive of Winkworth. And Adam Lawrence, Chief Executive of London-focused property developer London Square, reacted very positively to the prospect of a new government. “We welcome clarity” he said. “It will be good for the housing sector and business generally.”
Editorial note: the company name has been updated to Kensington House.
Original publication: kensingtonhouse.com, 1 June 2024. The organisations quoted are named in the text; their figures are reported as they stood on the publication date.