War in the Middle East is no longer the major force affecting the housing market, according to Knight Frank.

The group’s Head of UK Residential Research Tom Bill (pictured) says domestic politics including uncertainty about who will be the Prime Minister, is now the main factor affecting prices and deals.

The Middle East conflict is no longer the dominant force shaping the outlook for the UK property market.”

“The Middle East conflict is no longer the dominant force shaping the outlook for the UK property market,” he says.

“Provided there is no significant escalation in Iran, the power struggles on the left and right of UK politics will have a bigger impact than movements in energy prices or mortgage rates this year.

“This is particularly true as the US and Iran inch towards a peace deal.”

Domestic politics

A contest for the leadership of the Labour Party is widely expected, with Manchester Mayor Andy Burnham joining the fray if he wins this month’s Makerfield by-election.

“Burnham’s policies remain somewhat vague and changeable, which is no surprise given that he is trying to appeal to a wide range of electorates,” Bill says.

Wes Streeting, who is also likely to be a candidate, has advocated a Wealth Tax on landlords.

Downwards pressure

The downwards pressure on prices seems set to continue. The number of new prospective buyers in London was 18% below the five-year average in the first four months of this year, Knight Frank data shows.

Bill adds: “How long the downwards pressure continues will depend on what happens at Westminster in the coming months.”