Thursday 4 July 2024

What happened to house prices under the Conservatives?

I’m writing this article in the days leading up to the 2024 General Election, but it seems a pretty safe bet to declare that the current Conservative Government is no more. Sir Keir Starmer may well be the Prime Minister by the time you read this, with the Labour party taking a (strong?) majority. 

To mark the end of their reign, let’s take a look at what happened to house prices under the Conservatives these past 14 years.

David Cameron led the Conservatives to victory in the 2010 General Election against Gordon Brown’s Labour party. Without a majority though, he had to negotiate a Conservative-Liberal Democrats coalition before he became Prime Minister on 11th May 2010. The average UK house price stood at £170,846 at that time. 

Despite winning the 2015 General Election outright and freeing himself of Nick Clegg and the Liberal Democrats, he had tied himself to providing a referendum on the UK’s continuing membership of the European Union. Having ‘won’ referendums regarding Scottish Independence (2014) and how the voting system works (2015) it was third time unlucky as the ‘Brexit’ vote went against him. Shortly afterwards, Cameron stood down as Prime Minister on 13th July 2016, having seen the average property in the UK rise in value by 25.9% during his Premiership to sit at £215,127.

Teresa May then danced her way into the hot seat, with many forecasting a dramatic fall in UK house prices due to having exited the EU. Tasked with delivering Brexit she failed to outright win the snap-election called in June 2017 but maintained her authority by buddying-up with Northern Ireland’s Democratic Unionist Party (DUP). Things started well but then began to unravel for her and she stepped down as leader on 24th July 2019. At this point, UK house prices had edged up to an average of £232,618; a rise of 8.1% in the three years she was Prime Minister.

Boris Johnson then became the man at the helm, moving himself and an unconfirmed number of his children into 10 Downing Street. He soon set about tackling the pressing Brexit issues, but failing to win Parliamentary support chose to hold a snap-election in December 2019, in which he won a landslide victory. Pressing ahead with domestic affairs soon took a backseat though as the Covid-19 pandemic locked down the country. House prices were forecast to drop sharply at this point, but instead the vast amount of money committed by then Chancellor of the Exchequer (Rishi Sunak….we’ll come back to him) saw asset prices rise. A variety of scandals saw him depart as Prime Minister on 6th September 2022, whereby house prices in the UK had jumped by 24.1% in a little over three years (standing at £288,901).

The Conservative party held nominations and chose Liz Truss over Rishi Sunak in the final leadership vote. She became the fifteenth and final Prime Minister to serve under Queen Elizabeth II, who died two days after appointing Truss. Just a couple of weeks later Truss commandeered the ‘mini-budget’ that was to spook the markets and the public into losing faith in her ability. On 25th October 2022 she resigned, just 50 days after she had become Prime Minister - the shortest reign in British history (surpassing George Canning, who was prime minister for 119 days in 1827). The data suggests a decrease in house prices during her ’term’, albeit dropping by a mere £196 to stand at £288,705, which is little more than a rounding error.

Nevertheless, Liz Truss became only the second Prime Minister since house price data began to oversee a fall during their time in the top job. It probably won’t surprise you that the Prime Minister in charge during the credit crunch period (Gordon Brown) was the first to suffer this fate, with an 8.3% drop during his premiership between June 2007 and May 2010.

The Conservative party went back to the drawing board and decided the candidate they’d shunned first time round was really the person for the job - Rishi Sunak. Amid a cost of living crisis, energy crisis and ongoing war in Ukraine, house prices have not passed their peak again under Sunak’s Premiership. Despite soaring inflation elsewhere, the average UK house price sits at £281,373 (as of April data); a drop of 2.5% in the less than two-year time that Sunak went from ‘Dishy Rishi’ to ‘Sky dish Rishi’. 

All told then, when the Conservatives regained power in May 2010 the average UK house price was £170,846. They now stand at £281,373; a rise of 64.7% in fourteen years, having peaked and subsequently stagnated in September 2022 - exactly when Liz Truss took office (but also when interest rates stood at 1.75% compared to 5.25% today).

No party has ever seen UK house prices decrease during their reign, so those hoping that Labour will get the housing market ‘under control’ by lowering prices may be left disappointed. In fact, it’s almost as if house prices correlate to the popularity of a Prime Minister, which makes you question whether Starmer would actually want them to go down?

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