Savills sounds unsettled by the UK General Election

Helen Cahill
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Country On The Brink of Recession According To Business Leaders
The property firm expects sales to fall (Source: Getty)

Savills has warned that the UK General Election will hit the housing market over the next few weeks, with transactions set to fall.

In a statement on its annual general meeting today, the property firm also said sales volumes in the UK prime residential market had been lower this year due to the rise in stamp duty, which came into effect on 1 April 2016.

Read more: Talk of a “stagnating” housing market is unhelpful for sellers and buyers

The three per cent increase in stamp duty on second homes was a policy introduced by former chancellor George Osborne. The extra tax has cooled off buy to let investment.

House price growth across the UK has been slowing since the stamp duty hike, and many commentators have argued that the slowdown has been exacerbated by the Brexit vote.

This week, Halifax reported the first quarterly fall in house prices in over four years. In the three months to April, prices fell by 0.2 per cent. The average price of a UK property now stands at £219,649.

Read more: Here's where house prices have grown the most since the financial crash

Although housing supply remains low, propping up prices, Savills, and others in the property industry, expect transaction levels to fall in the lead-up to the General Election as buyers seek certainty before committing to buying a home.

Savills said: "While we have started the year well, typically the first four months represent a disproportionately small element of the expected outturn for the full year.

Read more: House prices have gone off track along the Southen Rail route

"Against a political and economic backdrop which demonstrates greater levels of uncertainty than a few months ago, we continue to anticipate that our performance will remain in line with our expectations."

Meanwhile, the mortgage market has never been more competitive.

Banks and building societies have been dropping rates in a bid to secure customers, with HSBC recently announcing a five-year fixed rate mortgage product at a rate of just 1.69 per cent. And the Yorkshire Building Society brought mortgage rates to an all-time low with its two-year standard variable rate of just 0.89 per cent.

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