Election fears squeezing house prices, survey finds

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The Independent Online

House-price rises dipped this month as buyers baulked at committing themselves before the general election and the property market showed more sign of losing momentum.

Although April's prices still came in 1.8 per cent higher than in the previous year, they saw a bare 0.2 per cent monthly rise, after 0.3 per cent rises in both February and March, according to the Hometrack national housing survey published this morning.

The number of homes on the market continues to significantly outstrip demand – up by 3.7 per cent and 1 per cent respectively, compared with March – and buyers are taking longer to commit.

The number of viewings per sale increased for the third consecutive month in April, with the uncertainty about the election cited as a common factor behind the indecision.

"The April survey shows further evidence of a housing market on the turn," Richard Donnell, Hometrack's director of research, said.

Property prices are also subdued thanks to the economy's fragility. "The bounce in market confidence over 2009 was all about pent-up demand feeding back into an undersupplied market," Mr Donnell said. "However, the fundamental issues which have plagued the economy for some time still remain. Rising unemployment, lack of mortgage funding, public-spending cuts and the prospect of tax rises post-election, continue to act as a back-drop to a fragile and increasingly polarised housing market."

Property prices improved rapidly last year as confidence in the market bounced back. And sales are now averaging 94 per cent of the asking price, compared with 89 per cent a year ago.

But the improvements are flattening out: agents are increasingly being forced to choose between pricing and sales volumes, and an average time to sale of 8.3 weeks is also levelling out, Hometrack has warned.

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