A London agency has reported that it has not experienced the increase in sales and lettings it had expected after last month’s election.
Knight Frank reports annual house price growth of 2.3% in the 12 months til May, the lowest recorded in five and half years.
The firm also says that while pent up demand has been released, new demand has not spiked as expected since a majority government was elected.
Tom Bill, Knight Frank’s head of London residential research, says that high-end buyers in the capital are still digesting the new stamp duty rates introduced in December.
“The stamp duty change came on top of a series of other tax revisions including to capital gains tax and the annual tax on enveloped dwellings. All of which followed an exceptional period of growth during the financial crisis. It underlines how the notion of a sudden return to double digit annual growth or any sense of ‘business as usual’ is unfounded,” he says.
“There has undeniably been a release of pent up demand in recent weeks but while some vendors may expect an ‘election premium’, buyers have not responded in a similar way.”
Meanwhile, Cluttons says that in the wake of the election, challenges still remain for London’s housing market.
The firm reports that the uncertainty surrounding the property market prior to the election contributed to house price growth at less than 4%, compared to a 9.6% increase recorded during the same period in 2014.
“The outlook for the London housing market has stabilised, while buyers and vendors have returned to the market following a conspicuous absence of activity. Our outlook for the rest of the year is for increased stability in the market and a return to a more normal state of activity,” says Cluttons' international research and business development manager, Faisal Durrani.
Cluttons forecasts modest Central London house price growth of between 2% and 3% in 2015, before accelerating to nearly 5% in 2016 and stabilising at around 4% per annum between 2017 and 2019.