15th June 2015
The surprise result of May’s general election has helped to drive property asking prices to a new high of £294,351 according to figures from Rightmove.
The property website’s latest House Price index showed that following the Conservatives winning an overall majority, new seller asking prices have risen by an average of nearly £8,500, or 3%, in June compared to the previous month.
The previous asking price record was £286,133 set in April of this year, £8,218 below this month’s record.
Miles Shipside, Rightmove director and housing market analyst said: “Some buyers had been holding back in the weeks before the election, leading to some sellers suffering an unseasonal price standstill in the late spring. In particular, sentiment and prices got hit in the mooted Mansion Tax price brackets. Now the unexpected election outcome has caused a strong rebound, prompting an upturn in buyer demand and helping new seller asking prices to hit their highest ever levels.”
Rightmove’s research highlighted that estate agents have reported that the election surprise has given a boost to market sentiment, driven by more certainty about future economic and taxation policies.
But while would-be buyers have been able to respond quickly to these events, many potential sellers have so far failed to come to market.
“This has pushed up some of the asking prices of those properties that have been marketed, meaning that buyers are faced with paying a new average record price high for the more limited choice available,” added Shipside.
Pre-election jitters contributed to a small fall of 0.1% in Rightmove’s May index. However, while June’s 3% rise is partly catching up on lost ground from last month’s fall, it is also a reflection of strong housing demand not being matched by suitable supply in many parts of the country according to Shipside. In fact the number of properties coming to market is down 8.5% on the same period a year ago.
Evidence of this is that six out of 10 regions have set new record price highs this month as the supply/demand imbalance and consequent upwards pricing pressure continue to head further north.
As well as the four southern regions, both the East Midlands and West Midlands reached all-time price highs this month. London has seen the strongest monthly price performance, up by 5.7%.
Shipside added: “While much of the price momentum has emanated from the south where the supply/demand imbalance is more acute, the strength of demand for the right property is resulting in a record price wave rolling further north, with the Midlands also at new highs. Sentiment and momentum seem to be flowing up the housing ladder too, as early year activity at the bottom and middle is now filtering through towards the top.”
Shipside noted the aftermath of the previous general election in May 2010 saw a 17% surge in fresh stock.
“Instead supply has tightened further, underlining the effects of the historic lack of new build. The top end £2m plus market sector has bucked the supply shortage with an 86% leap in new-to-market properties in the 30 days after the election compared to the previous 30 days. That will be of no comfort or use to the mass-market which needs more choice in the right locations at more affordable prices,” he said.