Election nerves hit UK housing market

  • 9 years ago
  • Uncategorized

Uncertainty surrounding the upcoming general election has hit the UK housing market.

Research earlier this year from broker Jefferies found that on average sales slow down in the four months immediately preceding elections.

Now, a growing range of indices suggest that pre-voting jitters have struck in the run-up to May’s vote. Mortgage lending in the UK slowed in February 2015, according to the Council of Mortgage Lenders, with the number of loans advanced totalling 40,600 – down 1 per cent month-on-month and 16 per cent year-on-year.

First time buyers, who have been particularly active in the past year, thanks to the assistance of Help to Buy, accounted for 18,700 loans, down 1 per cent month-on-month and 16 per cent year-on-year.

The trend continued in March, the Royal Institution of Chartered Surveyors revealed, with sales “flatlining” and the number of new properties listed for sale falling for the second month in a row.

The lack of supply in the face of demand saw the housing market’s imbalance continue to worsen, with 21 per cent more surveyors reporting a rise in house prices (up from 15 per cent in February) and 15 per cent more surveyors forecasting prices to increase in the coming three months.

In London, enquiries and the number of agreed sales both fell for the 11th month in a row, with 24 per cent more surveyors reporting a fall in the number of properties coming onto the market for sale.

“The boost that was given to the housing market by the Help to Buy scheme has begun to dissipate and activity levels have slipped back,” comments Simon Rubinsohn, RICS Chief Economist.

“Even more worrying are the tentative signs that price momentum could be set to pick up once again as the supply of stock to the market continues to fall. Anecdotal evidence does suggest that election uncertainty may be having some impact on the market, but underlying the trends visible in the latest survey is a very real housing crisis which will urgently need to be addressed by the next government.”

Northern Ireland outperformed the rest of the UK with the strongest house price growth in March, while price growth in Wales and England is expected to be more moderate in the coming months. Indeed, figures from Knight Frank reveal that Scotland’s rural property market is also not immune from pre-election jitters, with prime country house prices edging up 0.2 per cent across the first quarter of 2015, a lower increase than the 1 per cent recorded in Q4 2014.

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