May 2017

The final stages of the General Election 2017 campaign has seen all parties feverishly vying for people's votes and the uncertainty in the air has affected housing data negatively - the evidence suggests that people may be delaying buying and selling their homes until they know what the result will be. Although the uncertainty is arguably less than that which accompanied last year's EU referendum, the underlying trends describe a housing market which, in sales volumes, is continually shrinking.

Sales volumes were down in England & Wales and London, 21.0% and 11.7% respectively - this is the tenth month of a continual year-on-year decline - see the table/diagram below. Month-on-month, additionally, prices have fallen for four months out of ten.

Regarding prices in England & Wales, prices fell by 0.5% last month and year-on-year, prices are increasing at a declining rate. For London, prices fell 1.6% month-on-month and the same story of prices increasing at a declining rate can also be observed and more strongly than for England and Wales. Some 73% of home sales are going through for less than market price (see further details from the National Association of Estate Agents' (NAEA) March Housing Market Report below), this was a marginal decrease from the 75% of last month (all data taken from the most recently available data from the Land Registry House Price Index ).

The housing supply, according to the NAEA, has declined by 8% with houses per branch falling from 39 to 36 month-on-month.

The average house price in England and Wales is presently £227,549 and in London it is £471,742.

Housing proposals form a clear part of the Green Party's manifesto, albeit without major costed plans and projected numbers, whereas UKIP seems to have concluded that because it intends to cut immigration entirely, this should of itself cure the excess demand in the market. Plaid Cymru did not focus on housing either, although they have stated an intent to provide adequate housing for forces veterans and a scheme to make housing stock more efficient.

We discussed the housing proposals in the manifestos of the 3 main parties last month - to review these click here.

Mark Hayward, Chief Executive of the NAEA said: "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.

"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."

Andrew Boast, Co-founder of SAM Conveyancing said: "It's to be expected that a General Election is going to cause housing market uncertainty, something which we saw in the run-up to the EU referendum of 2016. The trouble is that it's just additional uncertainty on top of a market which is already dysfunctional and arguably becoming more so.

"We need the next government to take immediate, decisive action to aid the currently disastrous UK housing market with its chronically falling sales volumes, among other points of concern. Talk is most certainly cheap and political parties are apt to forget their weighty words when the campaigning has finished, and this would be disastrous given the need for fast, coordinated remedial action. The plight of first time buyers in particular should be in the thoughts of all parties seeking power."

We will only ever email you our monthly housing market update; we never release these details to any third party.