London house prices recover as sellers shrug off election

London house prices rebounded in May, rising to a record as buyers and sellers defied the usual trend of holding off on property transactions before an election.

The average asking price in the city rose 2.1 per cent from April to £649,864 (€751,520), property website Rightmove said on Monday, even with the upcoming UK general election on June 8th. The capital’s annual rate of price growth remained subdued at 0.9 per cent following a 1.5 per cent drop last month. That was the biggest annual decline in almost eight years.

“Time will tell how close these sellers get to their asking prices, but the uncertainty associated with an election has not deterred them from trying in increasing numbers and at an increased average price,” said Rightmove director Miles Shipside.

“New sellers in the capital seem to be showing less hesitancy to come to market than many other homeowners elsewhere in the country.”

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Unaffordable valuations

London’s property market has under-performed the rest of the country since the start of 2016. As the referendum to leave the European Union, tax increases and unaffordable valuations hit investor demand, more expensive homes have suffered the most.

Prices of homes in inner London rose just 0.6 per cent from a year ago, while outer London grew 1.2 per cent, Rightmove said.

At the national level, prices rose 1.2 per cent on the month and 3 per cent from a year ago, according to the report. The price of family-sized homes rose the most out of all types over the last 12 months. Rightmove also found that homeowners with children under the age of 11 are twice as likely to be moving.

UK prime minister Theresa May unveiled her Conservative Party’s manifesto last week, which contained few surprise policies that might affect the housing market. The Conservatives lead the main opposition Labour Party by as much as 20 points in polls.

“Moving pressures are understandably taking priority over electioneering and Brexit worries,” Mr Shipside said.