Demand drops in run up to General Election
A recent report has indicated that April saw a fall in demand for housing, corresponding with uncertainty ahead of the general election.
Issued by the NAEA Propertymark (National Association of Estate Agents), the Housing Report covers numerous aspects of the property market, highlighting sales and supply as well as property demand.
Per branch, April saw a fall in the number of prospective buyers registered. Following the drop in March to 397 per branch, April was down to 381, down by 4%.
This fall in demand has largely been attributed to the announcement of the snap General Election, scheduled for the 8 June. Like most uncertainty which occurs in the run up to a political decision, it is unlikely that demand will improve until the result becomes clear.
The impact of political volatility on market certainty can be evidenced in the fall of prospective buyers in the period prior to June’s European Union referendum. Brexit induced uncertainty last year pushed the number of prospective buyers per branch down to just 325.
Similarly to the level of demand, supply also saw a fall during April, with available properties per branch dropping by 8% month-on-month to 36.
The last time property supply had sunk below this level was April 2016, when agents had just 35 properties available.
In regard to agreed sales, the total number per branch followed the monthly trend, dropping from ten during March to eight. Unchanged from the previous month, the proportion of sales to first-time buyers held steady at 25%.
There was a rise, however, in the rate of sales agreed above the asking price, growing by a monthly 2%, up to 7%.
Commenting on the impact of political uncertainty was Mark Hayward. The Chief Executive of NAEA Propertymark highlighted the dependency placed on the Government to deliver on their policies as well as predicting how the property market might respond.
“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.”