18th May 2015
The fact the Conservatives sealed a majority win in the general election could take the brakes off the housing market, property website Rightmove has warned.
It highlighted that this month witnessed “an unseasonal drop in new seller asking prices”, down by 0.1%, or £242, a big contrast with May 2014’s rise of 2.1%.
In fact this is the first fall in the month of May for five years, as some sellers coming to market were forced to price more aggressively due to buyer uncertainty over the election outcome.
But Rightmove added that as the new government grapples with the long-term housing supply issues that contributed to a new national asking price record in April, May’s price pause gives only short-term relief to some buyers.
It now believes the unexpected outcome of a majority government has released the brakes on buyer confidence and activity, and will exert some upwards price pressure in the coming months.
Miles Shipside, Rightmove director and housing market analyst said: “Whilst activity was buoyant in early spring with demand for suitable housing outstripping the supply of property for sale in much of the country, it seems that pre-election jitters finally came home to roost in the final weeks of electioneering, with the average price of property coming to market dropping at this time of year for the first time in five years.”
He added that this is merely “an election-driven price stall” which gives some buyers only short-term relief from the back-drop of a long-term housing shortage, and many estate agents are now reporting a resurgence in interest following the surprise election result.
“Election uncertainty and particularly the threats of financial penalties to landlords and those with properties valued at over £2 million put a brake on the market, and their removal gives a reason for a rebound in activity and prices,” said Shipside.
However the Tory government faces the long-term challenge of delivering on their election promise to build 275,000 new affordable homes in the term of the current parliament.
Shipside added: “The underlying supply/demand imbalance has meant the election uncertainty has not had a negative price outcome in seven out of ten regions in the country. However, having been faced with an all-time asking price high in April of £286,133 nationally, any drop is welcome to those at the upper end of the stretched affordability curve.”