A study involving 1,200 potential home buyers planning to buy high-end homes found that 79% are not swayed by an impending general election when it comes to their moving plans. In fact, 13% are even more determined to move within the coming year. Only 8% are reconsidering their plans to move because of the election.
Those least worried about the election impact include individuals downsizing or relocating, as opposed to investors or second-home purchasers who prefer to wait.
Commitment to move strongest since the mini housing market boom
The eagerness to move within the next six months has grown significantly, with a net increase of 32%. This level of commitment hasn’t been seen in over two years. The most noticeable surge in confidence comes from first-time buyers and those looking to move up to a larger home—groups that had been less active over the past year.
Lucian Cook, Head of Residential Research at Savills, notes that with mortgage markets getting better, the housing market is showcasing early recovery signs. The survey shows increased confidence particularly among buyers who usually have more debt, which suggests a shift from a market dominated by cash-rich buyers. Cook also says that despite the election on the horizon, the expectations of government change are already reflected in the market. He suggests that while most buyers will go on with their plans, those at the higher-end of the market, where decisions are more discretionary, are likely to adopt a cautious ‘wait and see’ approach, with price sensitivity remaining until the election.
First signs of budgets increasing
With interest rates potentially being cut, double the number of survey respondents have increased their budgets compared to last summer (15% vs 8% in July). Additionally, there’s been a shift back to fixed-rate mortgages, with 44% now preferring a two-year fixed mortgage (up from 31% in January), and significantly fewer opting for a variable mortgage rate now compared to earlier in the year (11% vs 22% in January).
Cook explains that with inflation decreasing, borrowers now seem to favor shorter-term fixed-rate mortgages, anticipating further rate cuts down the line. This expectation gives those with mortgage financing the confidence to stretch their budgets, hoping for lower payments after the initial fixed term.
Pandemic trends unwind
Buyer preferences have evolved, with most prioritizing the size (65%) and the number of rooms (54%) in a home—increases from figures two years prior. In contrast, features that gained importance during the pandemic, such as outdoor space and dedicated home offices, have become less critical. Only 31% now consider outdoor space crucial, down from 42% last year, and a mere 7% still value having a separate home office space highly.
Cook concludes by stating that with the decline in working from home, prime buyers are focusing more on the physical space and room counts in their homes, especially those upgrading on tighter budgets.
