Coalition tonic for the market (From Your Local Guardian)

Coalition tonic for the market

3:49pm Thursday 8th July 2010

The outcome of the general election has served as an additional boost to the higher end of the property market, with both buyer and seller activity increasing.

According to property website Primelocation.com, the average value of a prime property (the top 25 per cent of all UK property by value) rose by one per cent last month to £456,983, with an annual growth of 1.1 per cent.

Prime platinum property (the top 10 per cent of all UK property by value) increased by 1.1 per cent to £639,536 in June, with an annual growth of 4.1 per cent – double the rate of annual growth in the normal market, which stands at two per cent.

London experienced high monthly price growth in the prime market, with a 4.0 per cent increase in June, taking average prices up to £1,146,755.

In addition to rising prices, stock levels are also on the increase in the prime market.

Sellers, encouraged by rising prices and increased buyer demand, have come out in force this month to put their properties on the market.

The supply of prime stock available increased by 8.7 per cent between May and June, and is now 70.9 per cent higher than a year ago.

This follows the trend in the overall UK market which saw a 9.3 per cent increase in properties for sale this month.

Ian Roberts, branch manager of Your Move estate agents in Sutton, said: “Many clients who are moving now have waited for a few years for the market to improve (along with the value of their own homes) and this applies in the higher price ranges too.

Many clients have been waiting for the right property to go on the market before putting their own up for sale.

“The abolition of the dreaded HIPs has meant more clients are happy to put their homes for sale without finding a place to buy first and the higher the value, the higher the demand as clients try to get into the better towns and locations within them. Stock levels generally are rising although anything in the higher price ranges tends to sell quickly and therefore not contribute to stock levels for long.”

Mark Everett, a partner at Michael Everett and Co estate agents, which has branches in Epsom and Banstead, says prices are now close to what they were in 2007.

He said: “Prices in the £400,000 to the £1m range have risen steadily and are now back at, or close to the 2007 peak.

“Dire shortages of homes for sale over the past year have ensured that prices continued to rise rapidly. As stocks start to increase, pressure should ease and prices stabilise.

“We have have seen small stock increases recently, but demand still exceeds supply with many active waiting buyers.”

Andrew Smith, research director at Primelocation.com, said: “The introduction of the Lib-Con government has acted as a tonic for the prime property market.

“Confidence has returned in the month post election, as decisive action has been taken to get the economy back on track and the deficit under control and, following a period of political uncertainty, both buyers and sellers are now back out in force.”