Home buyer demand surged in the UK during March, as almost 22 per cent more people were hunting for houses than in the previous month.
The uncertainty around next month's General Election was expected to dampen demand in the market, but the figures show healthy interest – in line with seasonal trends in a non-election year.
According to data from estate agent Haart, the number of new buyers was up 21.8 per cent between February and March while the number of new properties on sale also rose, by 27 per cent. Buyer viewings rose 22.9 per cent, but, despite these figures, sales were down 6.3 per cent.
Between March 2014 and March 2015, the number of new buyers dropped by 21.5 per cent, even including the monthly surge. New properties coming on to the market fell by 9.3 per cent and the number of sales was 19.3 per cent lower.
According to the latest ONS figures, UK property prices increased 5.6 per cent in the year to March, a growth figure far below the exceptional double-digit growth during 2014.
Why it’s interesting
The monthly figures are interesting because it’s election season and markets hate uncertainty. However, when we compare the state of play to what it looked like 12 months ago we get a real sense of how far the market has come off the boil – and how exceptional 2014 was for housing.
What is more, the average price paid for a house by a first-time buyer was £158,228 in March, one per cent lower than it was a year ago. Good news for those looking to get on the ladder, but a sign of the market cooling too.
After past elections, the housing market has tended to rise, which may explain why some are eager to move before the big day.
What Haart said
Paul Smith, chief executive of Haart, said:
Our advice to both buyers and sellers has been to enter the property market before heading to the ballot box in May, if they are considering doing so this year.
History tells us property prices tend to take a swing upward after a General Election and even for those current homeowners upsising, the increase in price on their new home will be greater than any gains made through sitting tight in their current property.
Our latest data indicates that prospective buyers and sellers have put their ducks in a row and are entering the market in high levels this spring – undeterred by the whispers of market uncertainty. This in turn has driven up UK property prices by almost 1 per cent in a single month and 5.6 per cent annually.
Last year was the year of rising prices and whispers of a bubble, whereas 2015 is likely to be far more muted, but with added uncertainty. In addition to the election, there is also the possibility of changes to the Bank of England’s base rate, which is likely to be hiked this year. Add to this mix the changes in stamp duty and fears of a mansion tax, and the stage is set for excitement.