News roundup of impact of general election on the housing market

Confidence is fragile ahead of the general election, according to the March 2010 Property Tracker Survey from the Building Societies Association (BSA). Only half of respondents believed that now is a good time to buy property. However, the survey found that the majority of people expected house prices to rise over the next twelve months.

When asked about their expectations regarding house prices, 59 per cent of respondents thought that the value of their home would rise over the next 12 months, down from 66 per cent in December.

Potential buyers expect property prices to rise over the next year showing that they believe that property remains a good investment.

Which political party is best for the property market?

A hung parliament is the most worrying scenario for house hunters but it seems the majority believe the best thing for the property market would be a Conservative victory. Its policies on the deregulation of the market and ensuring only millionaires pay inheritance tax have struck a chord with the voting public.

FindaProperty.com surveyed 14,800 of its users on whether they felt the housing market would improve, remain unchanged, or deteriorate given three different election outcomes.

• If the Conservatives were to emerge victorious, 39 per cent of house hunters say the market will improve, while a further 39 per cent believe it will remain unchanged.
• Just one fifth (22 per cent) think the market will deteriorate under a Conservative government.
• In contrast, 14 per cent of house hunters believe the market will improve following a Labour victory, with almost half (48 per cent) saying it will remain unchanged and 38 per cent feeling it will deteriorate.
• Only nine per cent feel the market will improve if no party wins an outright majority, with 43 per cent believing it will deteriorate.
• Despite the uncertainty, eight in ten (83 per cent) people searching for a property stated that they will continue their search regardless of the upcoming election and three quarters (74 per cent) said that the election result would not stop them buying a property.

Nigel Lewis of FindaProperty.com: "Many polls are pointing towards a hung parliament and that is worrying. House-hunters feel this would be the worst scenario for the property market as the parties battle it out to form a coalition, putting policies on hold while compromises are made."

Is now a good time to sell?

The growing uncertainty over the political direction of the country, is encouraging vendors previously sitting on the sidelines, to put their properties on the market.

The RICS UK Housing Market Survey published this week reveals that for the third consecutive month, the new instructions net balance outpaced the new buyer enquiries net balance. A net balance of 21 percent of surveyors saw a rise in new instructions which compares with a balance of 16 percent in February.

There are more properties on the market but house price rise slows according to RICS. Activity is expected to rise but prices are expected to more or less stabilise over the coming months.

However, with stocks increasing and sales decreasing we may see some modest price falls in some regions although London, the South East and Scotland are continuing to perform well.

On the surface, there isn't much for buyers or sellers to fret about: no party has any plans – not openly, at least – to change stamp duty or introduce radical new property taxes.

OliverFinn

April 20, 2010