House prices wobble as uncertain election looms
01-31-2015
Prices fell in four areas of the UK in the traditionally quiet month of December, but price rises could return with vigour after the election
It would make a lot more sense if stamp duty were more like income tax: nothing until the 1 per cent threshold; then 1 per cent of the value up to the 3 per cent threshold; and so on
The property market is returning to more sustainable price rises, experts say Photo: PA
By Dan Hyde, Consumer Affairs Editor
House prices are falling across a third of the country as the uncertainty of the general election plays on the minds of home buyers, figures indicate.
Property became cheaper between November and December last year in the South West, North West and the Midlands, according to the Land Registry. A separate study published by Nationwide Building Society indicated that prices across Britain at the end of last year were rising at their slowest pace since 2013.
Although a slowdown is normal for December as families focus on Christmas rather than moving house, experts said som
e regions would be "stuck in a rut" until after the election.
The threat of Labour's mansion tax on expensive homes had also led wealthier buyers to take a "wait and see" attitude, estate agents said.
Grainne Gilmore, a researcher at Knight Frank said, "At the top end of the market the outcome of the election will determine the position in terms of the mooted mansion tax. The uncertainty around this issue has started to weigh on activity."
Peter Rollings, chief executive of Marsh & Parsons, said: "Growth is likely to remain stable for the opening months of the year and after the general election, activity volumes will be turned up, once political uncertainty is put to bed."
In the Land Registry figures, which are a highly-regarded measure of the housing market, prices in the North West were shown to decline 1.6 per cent in December. Prices were down 0.9 per cent in the South West, 0.7 per cent in the West Midlands and 0.5 per cent in the East Midlands.
Selfridge's Department Store in Birmingham, where house prices have fallen
By contrast, prices rose 1.8 per cent in London. Overall across the UK prices were up 0.6 per cent on November and 7 per cent against the same time in 2013. The average house sold in December cost £177,766.
Adrian Gill, director of Reeds Rains and Your Move estate agents, said: "Growth is spread so unevenly across the country and in many regions property prices are stuck in a rut – or even sliding backwards.
"But December is the close of one chapter, and shouldn’t be viewed as a prologue to the coming year."
The Chancellor's reforms to stamp duty in December last year, which ended the large leaps in taxes paid when a property's price passed certain thresholds, was cited as one of the main reasons for optimism.
Mark Hayward, director of the National Association of Estate Agents, said the full effects had yet to filter through.
"While demand is particularly high at present, owning to the recent changes, the process of putting a house on the market for sale takes a little longer, and so the fact that we have not seen supply immediately increase following the reforms is not really surprising," he said.
A survey by Nationwide found that prices this month were up 0.3 per cent on December and 6.8 per cent on last January - the slowest pace since 2013.
Robert Gardner, chief economist at Nationwide said: "As we approach the election there is potential for heightened political uncertainty to weigh on housing market activity."
However, he said there was no "compelling evidence" from previous British elections to suggest a "strong impact" on prices.
"Indeed, it is possible that activity will increase in the months ahead if labour market conditions continue to improve and consumer sentiment remains buoyant," he added.