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Annual Property Price Growth Historically Stronger Under Labour

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    New Research Compares Property Market Performance Under Major Parties

    New research from Clifton Private Finance looking at historical house price data has shown that over the last 50 years, house prices have seen stronger growth performance during Labour governments.

    The research gives an idea of how the property market has performed under different governments in the past by comparing annual price growth. The study utilised data from the Nationwide House Price Index since 1954 and divided it between the two major political parties. Labour governed for 19 of the 50 years analysed, and the Conservatives were in power for 31 years.

    Since 1954, the average UK property price has increased from £1853 to £281,000. Historic property market performances are one factor investors often take into consideration when researching where to make a buy-to-let property investment.

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      Average House Price Growth 9.45% YoY Under Labour Historically

      The study reveals that average house price growth under Labour was 9.45%, and average growth while the Conservatives were governing was 6.45%.

      This shows that historically, property prices performed better while Labour was in power. This is surprising, as Labour was governing during the 2008 financial crash, and the Conservatives were in power during the Stamp Duty Tax holiday in 2020, which caused a small house price boom.

      Alex Morris, Private Client Adviser at Clifton Private Finance, said: “Product rates are beginning to drop ahead of the next base rate announcement, and there’s currently a good deal of optimism surrounding the property market. A combination of a sense of political stability and the Bank of England’s targets being hit across the board mean it’s likely we will see a base rate drop in August.”

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      Property Value Projections Based on Historical Growth Rates

      The research also includes potential average property value projections assuming these historical growth rates.

      Taking the average Labour growth rate of 9.45%, UK property will sit at approximately £690,000 by 2034. Using the Conservative rate of 6.45%, the average property price in 2034 would be around £520,000. The middle ground between these two rates is 7.95%, giving an average price of approximately £600,000 by 2034.

      While previous performance cannot guarantee a picture of the future market, some investors do look at historical data to help inform their choices when deciding on a buy-to-let business plan.

      Sam Hodgson, Editor at Clifton Private Finance, commented: “This research provides an interesting historical perspective on the relationship between political leadership and property market performance. While past data doesn’t guarantee future performance, these findings offer valuable insights for property investors and homeowners alike.”

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      Author

      Jessica Ferris

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      Jessica Ferris is a property writer at RWinvest, helping our readers stay ahead of property market trends with the latest news and statistics.

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