The most recent analysis from buying agents Garrington Property Finders suggests that the General Election in June has so far failed to give the prime property market a boost.
This has gone against the trend seen in the last five General Elections.
According to the data, the post-election paralysis has been seen most prominently in London. The annual change in prime property prices per square foot here slipped by 7.1% in the last month, dropping from a 3.3% increase in May to a 3.8% decrease in June.
In addition, the number of transactions is also down, with the number of prime properties sold in London during June falling by 15.8% in comparison to May.
Data from June for the rest of England and Wales has yet to be published, although the capital’s Prime market is seen as a good indication of the results to follow. Should these trends be seen elsewhere, we will see a dramatic reversal of the more traditional post-election bounce seen in the UK’s prime property market.
Analysis of official Land Registry data shows that across England and Wales, sales of prime property increased by an average of 26% in the two months directly after the last five Elections.
In fact, the prime market has outpaced the non-prime market stretching back to Tony Blair’s victory in 1997.
The prime market is defined as the most expensive 10% of properties sold in a region in any one year. During the first six months of 2017, the prime market began strongly, with prices rising by 4% on average.
Election result preventing traditional house price surge
Jonathan Hopper, Managing Director of Garrington Property Finders, observed: ‘This early snapshot of the post-election market confirms what many had feared – there has been no sudden relief rally. The Prime market tends to be the most sensitive to political and economic uncertainty, and the current dose of both is clearly having a cooling effect, especially in London. Britain hasn’t had a minority government since 1974, so the fragility of the new government’s mandate and ongoing concerns over Brexit are pushing the market into uncharted waters.’
‘Yet for astute buyers those uncharted waters can teem with opportunity. Prime prices in London have softened considerably in the wake of the 2014 Stamp Duty increase and last year’s Brexit referendum. In that time we’ve seen a steady stream of buyers secure substantial discounts as anxious sellers adjust their expectations in return for the certainty of a sale,’ he continued.
Concluding, Mr Hopper said: ‘Where London leads other regions tend to follow, and as the post-election fizzle spreads out from the capital, the next few months will provide some strong buying opportunities for Prime buyers across the country.’