It’s been difficult to determine whether the General Election, the Euros or Taylor Swift’s UK tour has had the biggest impact on the public mood in June. Of the three, the last presents the best opportunity to pepper this month’s market update with cultural references.

And so, Dear Reader, while Fridays’s front pages were dominated by Labour’s landslide victory at the ballot box, and the back pages by speculation regarding Saturday's fixture between England and Switzerland, I’ve made sure there’s something for the Swifties among you within our usual round up of the housing market.

As those who follow the economic headlines will know All Too Well, we saw headline inflation fall to the Bank of England’s target of 2.0% in the run up to the General Election. Even though the MPC continued to vote 7 to 2 to hold Bank base rate at 5.25% in June, that is likely to pave the way for interest rate cuts later in the year.

That has undoubtedly mitigated the risk of a Cruel Summer for the UK Housing Market. Indeed, the Nationwide reported that house prices remained stable in June; a 0.2% monthly rise, leaving values up 1.5% year-on-year.

Last week, the Bank of England also reported that mortgage approvals held steady in May, coming in marginally below 60,000.

However, homebuyers were not entirely Fearless in the face of a General Election. Data from TwentyCI shows that while agreed sales were 8% above market norms between March - May, they were 8% below the same benchmark in June. Yet with the prospect of cuts to the Bank base rate gradually feeding into mortgage rates over the autumn, we expect the mainstream market to be temporarily affected by the political hiatus and to Shake it Off over the coming months.

Given the political rhetoric flying around in the run up to the election, the top end of the market has faced its own Champagne Problems. However, as detailed in our press release our prime index results show that this did not substantially affect prices over the second quarter of the year.

• In prime central London, where we are closely monitoring the implications of potential changes to non-doms taxation, prices fell by just 0.4% over that three month period. Ongoing market activity was supported by higher proportions of UK nationals and those overseas buyers who are not UK residents, while those directly affected weigh up their options.

• By contrast, across the rest of prime London where domestic demand is generally more dominant, prices were essentially flat, rising by 0.1% in the quarter.

• There was a little more evidence of caution in the prime regional markets, where prices also eased back by 0.4% in the quarter, having shown signs of bottoming out in the first three months of the year. 

Meanwhile, though annual levels of rental growth have eased back to 2.5% and 2.6% across both the prime London and prime regional markets respectively, rents rose by 0.7% in the second quarter across these markets. Across the wider market, Homelet now puts annual rental growth at 5.7%, with modest rental growth of 0.2% in each of the past 2 months.

Looking forward, after a blitz of manifesto commitments (which you can read more about here), the new government will be keen not to appear the Anti-Hero, leave a policy Blank Space or create any Bad Blood with the electorate. That should mean the fate of proposals regarding rental reform, planning, non-doms and VAT on private school fees should become much clearer over the coming weeks and months.  

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