Nationwide have just released their latest house price index for May 2017 showing a third consecutive monthly fall in house price growth rate, down -0.4% over the month. But despite this house prices have continued to increase, up 2.1% annually, now at £208,711.
Nationwide also examined the detriment that a general election has had on the housing market historically and found that it doesn’t tend to generate enough volatility to have a noticeable impact. But the eMoov CEO and founder, Russell Quirk, has highlighted that a snap election mid-Brexit isn’t your average election and buyer demand is almost certainly stifled by the uncertainty shrouding the current political and economic landscape.
A third consecutive drop may seem like a reason to worry for UK homeowners, but house prices still continue to climb despite the slowdown in the rate of growth.
It is unclear as to whether the market is losing momentum or if buyer demand is unseasonably hibernating due to the oncoming election, but Nationwide have been quick to highlight that previous elections have had little impact on traditional house price trends.
It’s fair to say, however, that previous years were a tad more routine that a snap election called in the middle of negotiations to leave the EU and it is likely that the market is seeing an influence from both sides.
House prices, along with the gap when compared to earnings, have continued to increase and such a pattern is unsustainable in the long term. It is likely that we will see the market let off a little steam and naturally adjust over the coming months and overall it should stabilise once the election dust has settled and buyer confidence returns to full force.Russell Quirk