The General Election has had little to no effect on the UK property market, according to the latest report, which suggests it is ‘business as usual’ for the industry.
The new House Price Index from Rightmove shows that the number of sales agreed at this time of year is up seven per cent and the second highest for ten years. At the same time, there has been a slight reduction in the price of property coming to market, which has fallen by 0.4 per cent – the first decrease since June 2009.
As a result, the annual rate of price increase now stands at 1.8 per cent, largely driven by increased sales in the north of the country, which have risen by more than 11 per cent compared with 12 months ago, compared with just three per cent in the south.
Continuing political uncertainty regarding the election and resulting hung parliament had been expected to dampen consumer activity, but the general drivers of activity are largely unchanged, with high first-time buyer (FTB) demand, which is driving movement higher up the ladder, and supported by the cheap cost of borrowing.
Miles Shipside, Rightmove director and housing market analyst, said: “Demand is still high and markets in some parts of the country seem to be getting used to coping with instability and are still strong. The high levels of sales being agreed show that the underlying fundamentals are largely unchanged.”
FTBs continue to have a sustained, positive effect on the property market, with these demographics appearing to brush aside uncertainty due to the ongoing desire for home ownership, government assistance, and the relatively low cost of mortgage repayments.
Business as usual
The report noted that markets traditionally slow in the second half of the year, and with a slowing in the pace of asking price rises and the forthcoming months of political and economic confusion, the usual slower market in the second half of the year seems to be “one of the few certainties” in 2017.
However, Mr Shipside added: “Ongoing strong housing demand is evidenced by buyer enquiries to agents picking up to a degree after the surprise election result. They were three per cent higher on the Monday after the election than the Monday before, showing that people are getting on with addressing their housing needs.”
Kevin Shaw, national sales director at estate agency Leaders, observed that May was a busy month for sales, with buyers and sellers alike seemingly unaffected by the looming vote, and the post-election market.
“Since June 8, even with the continuing political uncertainty, it’s very much business as usual for the property market,” he explained. “Whilst some people may be adopting a wait and see approach, many more are wanting to press on with their property transactions.”
It comes after figures compiled by the Council of Mortgage Lenders revealed that mortgage lending in the UK has increased by almost a fifth over the past year. Home buyers borrowed £9.6 billion in April 2017, which represented a 19 per cent increase on April 2016, while 51,200 home loans were taken out; a nine per cent rise on the year before.
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