Sellers stick after general election result

Last month’s unexpected General Election result scared off sellers, with new property listings dropping 1.9% in June compared to May, according to the latest Property Supply Index compiled by online estate agents

Theresa May’s decision to call a snap General Election backfired spectacularly, and coupled with Brexit fears, the housing market is suffering from a crisis of confidence. With price growth stalling in many areas, the predicted post-Election spike in new property listings was little more than a trickle, as homeowners chose to stick rather than sell.

How political events are influencing decisions to buy and sell property

Of the 100 towns and cities that analysed, 81% of areas saw property supply fall in June compared to May. Dundee and Barnsley registered the biggest drop offs in property supply, down 48.1% and 39.3% last month. Of the few areas that saw a rise in new listings in June, Lichfield and Hartlepool registered substantial gains of 20.6% and 18.7% respectively.

The capital bucked the trend, with property supply up 5.3% across the boroughs. Sutton stood out with new property listings in June up by more than half (54.1%) compared to May. The following table shows the London boroughs which saw the biggest rise in property supply in June:

Alex Gosling, CEO of online estate agents, comments, “The supply drought continues. The property market was hoping for a downpour of new stock in June, but the Conservatives crawling over the line failed to deliver the injection of confidence the market needed, and put paid to any chance of a late Spring bounce. Price growth has stalled, and sellers, it appears, are choosing to stay put, rather than accept marketing their properties at a lower price then they might have done a few months ago.

“Sellers maybe need a dose of reality, because price growth slowing should not be the only reason to hold-off moving. The housing market overheated and it was inevitably going to cool at some point. If sellers are waiting for prices to go up again, that could be a long wait. If anything, homeowners should see this as a good climate to sell as long as they price correctly. If prices have dropped where they live, they are likely to have dropped, possibly by even more, in the area they’re planning to buy.”

Meanwhile, the latest research from another estate agent, haart, shows that affordability for first-time buyers has increased again. The data shows a rise in prices of three per cent across the board in June, against a rise of five per cent for new buyers.

Hometrack report says London house prices will drop by 3% in 2017

Paul Smith, CEO of haart, comments: “Our June data exemplifies a property market that is experiencing a boost in the wake of the General Election as house prices rise across England and Wales, in London and for first-time buyers. This is a far cry from predictions which are hinting around a potential housing crash, fostering homeowner negativity, and do nothing for a market which relies so heavily on consumer confidence.”

“Clearly neither Brexit nor the general election result is having much of an influence. Our recent survey of over 2,000 home owners found that Brexit has had no impact on over 75% of Briton’s decisions to buy or sell a property, and this month we saw new buyer registrations jump up 10% on the month, and even new stock coming onto the market is up 11% in England and Wales. Green shoots are also finally emerging in London, where stock is up a huge 14% on the month.”

“However unaffordability still remains too big a barrier for many, and this will not be resolved until we improve housing supply on a bigger scale than ever seen before. This can only be achieved when we resolve the gridlock that is house building, and introduce incentives for greater fluidity in the market.”

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