The unexpected outcome of the general election has given a shot in the arm to sellers and agents leading to a 3.0 per cent rise in asking prices in just one month according to Rightmove.
It says the average asking price of a property on sale is now £8,460 higher than just over four weeks ago, at £294,351 - an all-time high.
Six out of 10 regions have set record high asking prices and the imbalance between supply and demand is worsening in more areas of the country, the portal claims.
“Agents report that the election surprise has given a boost to market sentiment, driven by more certainty about future economic and taxation policies. 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” explains Miles Shipside, Rightmove director and housing market analyst.
The previous asking price record was £286,133 set in April of this year. Pre-election jitters contributed to a small fall of 0.1 per cent in Rightmove’s May index revealed last month, which has made the size of the rebound in June appear somewhat more dramatic.
However, while June’s 3.0 per cent 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 says Rightmove.
Evidence of this is that six out of ten regions have set new record price highs this month as the supply/demand imbalance and consequent upwards price 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 per cent, aided by the higher-priced boroughs seeing more top-end owners willing to come to market now that the threat of the Mansion Tax has been removed. However, supply elsewhere in the market remains remarkably low.
“The aftermath of the previous general election in May 2010 saw a 17 per cent surge in fresh stock, and a similar increase would have been a welcome—albeit temporary—relief for the under-supplied housing market, as well as for choice-starved buyers. Instead supply has tightened further, underlining the effects of the historic lack of new build” says Shipside.
“The top end £2m plus market sector has bucked the supply shortage with an 86 per cent 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 says.