London Leads House Prices to Record in Post-Election Surge

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Asking prices for London homes surged to a record this month, with gains led by the city’s most expensive districts after the Conservative Party’s election victory.

Prices rose 5.7 percent to more than 600,000 pounds ($930,000), with Kensington and Chelsea up 25 percent, property website operator Rightmove said on Monday. Nationally, asking prices increased 3 percent to 294,351 pounds, also a record.

Concerns about new property taxes before the general election were alleviated when Prime Minister David Cameron won a surprise victory on May 7. Rightmove said the number of properties in London with a price tag of 2 million pounds and over almost doubled in the month.

“The strong rebound in prices has been exaggerated by some owners of upper-price bracket property returning to the market,” Rightmove Director Miles Shipside said. “Having downed their selling tools in the run up to the election, many have now picked them up again.”

Property prices in Kensington and Chelsea fell 23.1 percent in May, meaning this month’s increase brought homes in the borough back to their usual mid 2 million-pound mark, Rightmove said. Otherwise, the biggest monthly price changes in Greater London were in Merton, Brent, Newham, and Richmond Upon Thames, Rightmove said. The worst monthly performers were Tower Hamlets, Hackney, and Southwark.

‘No Comfort’

While sellers at the top end of the market returned in response to the election result, a broad increase in supply to help satisfy demand and temper house-price inflation hasn’t yet materialized, Rightmove said. Across England and Wales, the number of new properties coming to market was down 8.5 percent from a year earlier and 3.9 percent less than in May.

“That will be of no comfort or use to the mass market which needs more choice in the right locations at affordable prices,” Shipside said. Six out of 10 regions surveyed by Rightmove hit record prices this month.

The shortage is heading further north, Rightmove said, with the East and West Midlands reaching new records alongside the four southern regions.

The report comes days after an index by the Royal Institution of Chartered Surveyors showed Britain’s housing shortage is at its worst level in almost four decades. Shipside said the government must “urgently deliver more new-build homes.”

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