House prices dampened by the election

City A.M. Reporter
UNCERTAINTY over the outcome of the general election put a dampener on house prices in May.

May’s monthly house price growth held steady at April’s three-month low of 0.2 per cent, property data company Hometrack said yesterday.

Increases in sales, new buyers and new properties were all the weakest since January, when unusually icy weather caused widespread economic disruption.

“Uncertainty generated by the election had a clear impact on housing market activity with fewer buyers coming to the market, a marked slowdown in sales agreed and a drop off in the number of new homes for sale,” said Hometrack’s director of research, Richard Donnell.

As in April, price rises were concentrated in London and south-eastern England, according to Hometrack’s survey of 1,500 estate agents and surveyors.

Hometrack expects housing market activity to remain subdued over the summer and into the autumn as households shift their focus from the election to the emergency Budget.

The property data company also said a rise in capital gains tax could see a short-term spike in homes for sale.

Mortgage lenders Halifax and Nationwide have reported that property prices have risen around 10 per cent from a low hit around a year ago, but access to finance is still hard for many buyers after the credit crunch.

Nationwide reports May house price data on Thursday.