UK housing asking prices up ahead of elections, due to lack of supply

Asking prices for UK homes have risen to a new record high unseen since last June amid growing demand and a shortage of supply of properties, according to the property website Rightmove that said new sellers’ asking prices increased by 1.6%, or GBP 4,381, month-on-month in April to GBP 286,133 on average across England and Wales.

So far, this year’s newly-marketed property numbers are down by 4% compared with the January to April period in 2014. But, demand from prospective buyers is on the rise with Rightmove saying it posted its busiest month in March.

With just weeks to go until the elections, Rightmove said that the challenge to meet the country’s housing needs is greatest in the south of England, including London, the south east, the east of England and the south west.

In these areas, the typical price of property coming to market is up by more than a quarter (27.5%) or GBP 84,874 compared with the time of the 2010 elections.

Severe property shortages in London have pushed prices up by GBP 195,420 or 49% over the last five years, with buyers looking for a home in the capital now facing an average seller asking price of GBP 594,585.

The commuter belt of the south east region has also seen the knock-on-effects of strong price growth in London as house hunters cast their nets wider for more value, with asking prices there having increased by 20%, or GBP 62,105, over the five-year period.

House prices in northern England sawd a £6,374, or 3.7%, rise over the last five years.

In Wales, new house sellers’ asking prices now stand on average at GBP 176,912, having increased by 3,489, or 2%, over the last five years.

“With low wage inflation, the increasing cost of housing is another burden for many. The problem is especially acute in the south, particularly those areas influenced by the high demand for housing reach within the capital,” said Miles Shipside, director of Rightmove.

The Royal Institution of Chartered Surveyors (RICS) raised concerns last week that it is seeing signs of a “worrying” upward pressure on house prices amid the lack of homes to choose from.

Experts have suggested that some sellers could be awaiting the outcome of the election before putting their home on the market. Buy-to-let investors are also snapping up homes as a longer-term investment - which means properties are coming on the market less frequently, Rightmove said.