Will a Conservative win boost house prices in the UK?
House prices in Britain climbed £100 a day in April. The Conservatives’ victory in the General Election has instigated predictions that house prices will be boosted further. Auction House London looks at the implications.
Having a stable Government majority will in the short term alleviate worries about major sudden changes. The pound rose almost 2 % against the dollar and the Euro. This is the sharpest climb in 6 years. Obviously the traders are happy. A saver with £50,000 in a pension linked to the stock market would have improved his or her lot by about 2.3 % or £1,150 in one day.
This has been reflected in the new figures showing that house prices will be boosted further than the £100 a day. The rise pushes the average value of a home across the country to almost £200,000 up from £193.328. This is up 1.6 % from March and 8.5 % above last year.
There is a high demand from potential buyers seeking the right property. However a shortage of houses on display in estate agents offices. A combination of slowly rising employment and an economic upturn has kept growth rising by 2.2% to 2.6% on a regular three month basis and a yearly rate of 8% to 9%. This may or may not continue as the year unfolds and new policies are introduced. There is also the possibility that house rises will outstrip average wage increases, resulting in a slowdown.
Property experts predicted a return to rapid house price rises after the threat of the mansion tax, which had been central to the Labour campaign, disappeared. Foreign investors who had held back before the election are now starting to return, looking for good property.
One market oracle predicted that the election would be very much linked to the rise of house prices and got it remarkably accurate. They stated that an average house price inflation rate of 8.5% would result in a Conservative overall majority of at least 30 seats with average UK house prices breaking to a new all-time high, just prior to the May 2015 general election.
Other reasons for house price rise post-election results
The Conservatives have promised a £175,000 person allowance for married couples/civil partners that is transferable when they die and the main residence is passed on. Combined with the existing £325,000 nil-rate band we have at present, parents could transfer property worth nearly £1million free of inheritance tax.
Tax-free personal allowances should rise from £10,600 to £12,500. The Conservative party has stated clearly that income tax, National Insurance contributions, nor VAT, will rise.
Conservative policy says that tenants of housing association properties can buy their home at a large discount with the ‘Right to Buy’ scheme. Homeowners under new government legislation would have the right to a “Help to Buy Isa,” which adds £50 to each £200 saved for a deposit, this would be to a maximum top-up of £3,000. And anyone who can produce a 5% deposit can apply for a Government loan over five years that is interest free.
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