General election 'could influence house prices'

Date:Wednesday 16th September 2009
Author: Max Freedman

A general election could have an impact on house price growth because of a change in spending habits, claimed an industry insider.

Gary Smith, president of the National Association of Estate Agents, pointed out that people often rein in their spending whether there is a change of government or not.

Since the next general election has to be called by May next year, he commented that this will no doubt affect the recovery of house prices in the short-term future.

"In that sense, there could be a period where house prices are not increasing as much as they should," he added.

Mr Smith pointed out that there is a chance that people will buck the trend and see that they are not getting enough of a return on their savings because of low interest rates.

This could inspire them to invest in property despite the state of the housing market.

A report released this week by Ernst & Young indicated that property prices will not hit the level they were at in autumn 2007 for at least another five years.