House prices in Britain climb £100 a day and it's about to get crazier
05-09-2015
House prices in Britain climb £100 a day and it's about to get crazier
A surge of sales and spike in prices triggered by the Conservative general election win
House prices rose 1.6pc in April according to the Halifax.
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By Anna White, Property correspondent
House prices in the UK rose by more than £100 a day in April. It takes the average value across Britain to nearly £200,000 - making it even harder for young workers and families to get a foothold on the property ladder.
Momentum is returning to the housing market after a muted six months, when a combination of tighter lending conditions, a natural adjustment after the strong recovery in prices, and political uncertainty ahead of the general election slowed demand.
New data from the Halifax, released this morning, showed that the annual growth rate - the most important indicator for direction of the housing market - increased from 8.5pc for the 12 months to April, up from 8.1pc for the year to March.
This took the average house price from £193,328 to £196,412 in a month, fuelling fears that unless housing supply is significantly increased quickly, the homeownership dream will remain out of reach for many.
"Housing demand is being supported by a number of factors including economic improvement, rising employment and low mortgage rates. At the same time, supply remains very tight with a general shortage of properties available for sale," said Martin Ellis, housing economist at the Halifax.
"This combination has kept house price growth steady in recent months with prices increasing by 2.2pc to 2.6pc on a quarterly basis and an annual rate of 8pc to 9pc."
While the quarterly growth rate fell back slightly from 2.6pc for the three months to March, to 2.2pc for the three months to April, a surge in sales and prices is now expected to follow the Conservative party win.
The result of the general election has put an end to the recent spell of uncertainty that has stalled the housing market.
A Tory majority government will boost transaction levels as vendors who have been sitting tight - especially in the upper echelons of the market where the threat of Labour's mansion tax has supressed sales - put their homes on the market in large numbers.
"We should now see the other side of the pre-election slowdown in activity – the recovery," said Johnny Morris, head of residential research at the estate agent, Hamptons International.
"Transactions typically end up 15pc above what you would expect in an average year for at least six months after the election. That potentially means a 30pc difference between activity numbers in the 6 months in the run up to the election versus the 6 months after," he said.
A jump in transactions will then translate into a spike in house prices for Britain.
Henry Pryor, an independent buying agent said: "House prices will bounce on the outcome up by 5pc by Christmas. Rents will continue to creep up whilst the woeful volume of new homes being built will look like the Liberal Democrat share of the vote. "