Election could hit housing market as buyers and sellers sit on the fence

ESTATE agents and market commentators believe so many buyers and sellers will sit on the fence during the General Election campaign that the fragile housing market will probably grind to a halt in some areas until late-May.

Figures from HousingExpert.net say at the current rate it would take 10 months to shift all the properties currently on sale.

Around 750,000 homes are currently on the market, but monthly sales in February were 74,000 - barely half the level at the mid-2007 peak.

After looking at the latest Halifax, Land Registry and Rightmove analyses, Henry Pryor at HousingExpert.net says the average asking price of homes going on sale is 229,600.

But the average selling price is only 164,500, suggesting that most of the activity in the market is at the lower end. The long-term average gap between asking and sale prices is only 42,000.

Mr Pryor adds: “Anybody putting a house on sale this week is likely to have to wait until after May 6 before a buyer is prepared to commit themselves seriously.”

Stuart Law, chief executive of property investment specialist Assetz, says: “In the month before voting day we are likely to see a slowdown in transactions as buyers and sellers wait to see which party reigns supreme.

“If the Conservatives win, the changeover could engender short-term optimism among consumers and as a result we will see some growth in the property market.

“If Labour remains in power, I would expect little change in property transactions nationally, although the party's refusal to acknowledge the growing deficit could result in the pound sliding and more foreign investors exercising their increased buying power in the capital.”