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UK: Cooling in property market as May general election approaches

The monthly survey from the National Association of Estate Agents (NAEA) indicates that some 30% of total house sales in February were to people getting in the housing ladder for the first time, the highest number since September 2014. Almost a third of house sales in the UK are going to first time buyers but overall the market is cooling in the run up to the general election.

The data also shows that 46% of NAEA members have seen a cooling in the property market as the May general election approaches and 27% think the election will have the biggest impact on the housing market this year.

Findings in February also show that demand for property is up, with 366 house hunter’s registered per NAEA member branch, up from 353 in January. With supply marginally down from 44 houses per branch last month, to 43 this month, there’s still a significantly higher demand than supply of housing, a problem that is unlikely to be solved anytime soon.   The total number of sales agreed in February remained the same as previous months, with eight house sales going through per NAEA member branch.   The managing director of NAEA, Mark Hayward, said It’s clear from the findings in the report that things are starting to ease for first time buyers, which could be down to reduced property prices or more accessible funding, especially following December’s stamp duty reforms.

He also added that the NAEA will be waiting with bated breath to see if the first time buyer figures increase following the new Help to Buy ISA, and whether a real momentum in the market is seen. It still remains notoriously hard to get cut through in the property market, especially for first time buyers, so any green shoots are encouraging.   When it comes to policy proposals in the run up to the election some 45% of agents think that the Conservatives’ pledge to build 200,000 more homes will have the best impact on the housing market. On the downside, 57% of agents think Labour’s proposed Mansion Tax will have a negative impact on the housing market.   ‘Demand is still vastly outweighing supply in this country, so it is clear something needs to be done to aid this growing problem. It will be interesting to see the outcome of this year’s General Election, but whoever wins it is vital that building more affordable homes is top of their agenda,’ Hayward concluded

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