Election uncertainty causing drop in property demand

The most recent report from NAEA Propertymark has indicated that the house-hunters registered per estate agent slipped during April.

There were 397 property hunters registered per branch in the last month, in comparison to 425 in January and February.

Election Uncertainty

According to the report, the decline is most likely to be down to the uncertainty triggered by the snap General Election, with buyers and investors holding fire until the result has been announced.

Indeed, last April, amidst the backdrop of Brexit uncertainty, the number of house-hunters per branch was 17% lower than this year.

What’s more, the supply of property also fell during April. In March, there were 39 properties available per member branch, but this dropped to 36 in April – a fall of 8%.

Election uncertainty causing drop in property demand

Election uncertainty causing drop in property demand

Slowing Sales

Sales also fell in the month, from 10 per branch in March to 8 in April. However, the rate of sales agreed above the asking price increased to 7% from 5%.

Mark Hayward, Chief Executive of NAEA Propertymark, observed: ‘Periods of political uncertainty tend to halt activity in the housing market, and this is exactly what we’re seeing this month. All of the main political parties have outlined significant housing promises in their manifestos and we’d hope to see these policies rolled out in the new Government’s first six to 12 months in Parliament. Buyers and sellers alike are recognising this and adopting a ‘wait and see’ strategy to decipher how or if the value of their existing or future homes will be affected.’[1]

‘However, despite the fact that increasing housing stock is playing a part in the Election campaigning, more often than not we find these pledges are unachievable and turn out to be empty promises. It’s therefore important that the market doesn’t totally stall as this could trigger an unintended domino effect, which we could still feel the effect of years later before supply increases. A business as usual approach will ensure house-hunters are met with a healthy supply of properties to view, and sellers get a fair price and a good buyer,’ he added.[2]

[1] http://www.propertyreporter.co.uk/property/election-wobble-cited-as-main-cause-for-dr0p-in-housing-demand.html

 

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